Financial literacy for children: How small initiatives can help them grow into responsible adults

In our generation, healthy saving habits were instilled early on through the simple gift of a piggy bank. Any money we received, be it as birthday gifts or rewards for our achievements, was encouraged to be saved in the piggy bank and used wisely when we wanted to buy something. This practice was a foundational step in teaching Indian children the value of saving.

A technologically advanced generation

Today’s younger generation, however, is far more advanced than previous ones. They are already learning complex computer languages, exploring machine learning, and engaging with concepts like artificial intelligence. Economics is now part of school curricula. Given their exposure and capabilities, involving them in formal financial systems is not just beneficial, it’s essential. The adolescent kids today are far more active, independent and technologically savvy.

Recognising this, the Reserve Bank of India (RBI) has recently issued revised guidelines permitting minors aged above 10 to independently operate their own savings and term deposit accounts. While the RBI’s 1976 circular already allowed minors of any age to open such accounts through their natural or legal guardians, the latest update extends operational autonomy to those above 10 years of age.

Under these new guidelines, banks may offer minor account holders services such as internet banking, debit or ATM cards, and cheque books, subject to the institution’s internal risk management policies. However, the RBI has clearly stated that minor accounts must not be overdrawn under any circumstances and must always maintain a positive balance. Additionally, banks are required to conduct due diligence and ensure full compliance with relevant regulations and their own internal policies when offering these services to minors.

Thus, effective from July 1, 2025, children, since they will have exposure to managing and operating their personal savings account, will learn the concept and power of savings and earning interest income which is a strong step toward promoting financial literacy from a young age.

While financial literacy encompasses a broad set of skills, starting with saving and managing money, whether received as gifts or earned through household tasks, lays a strong foundation. Practical experience with banking systems, learning how interest works, and using savings tools like term deposits will empower these children as they grow into financially independent individuals. As these children grow up, the words “credit” or “debt” may not feel quite as daunting, since they will have started their savings and spending journey early and gained familiarity with financial tools.

For a long time, young individuals were often advised to steer clear of borrowing or seeking credit during the early stages of their financial journeys. The prevailing belief was that credit was inherently risky, something to be avoided unless absolutely necessary. Credit, in that context, was seen as a burden rather than a tool, and the lack of understanding around its responsible use often led to a fear of engaging with it altogether.

With the digital transformation of financial services, widespread access to mobile banking, and an increasing focus on financial literacy, today’s youth are growing up in a very different financial ecosystem. There is a growing recognition that early exposure to financial tools and banking services is not only beneficial, it’s essential. Cultivating the habit of saving, learning to manage digital wallets, and engaging with financial products in a responsible way allows young people to become more financially aware and empowered from an early age.

One of the key developments in this shift is the focus on individuals who are New to Credit (NTC) , those applying for credit for the first time. Often, these individuals are also new to the broader banking system, unfamiliar with how accounts, interest rates, credit scores, and formal financial processes work. Historically, they would enter adulthood without any formal financial history, facing hurdles when trying to access credit for education, entrepreneurship, or personal needs. However, the early inclusion of individuals aged 10 and above into the banking system is expected to largely address this concern.

More importantly, by promoting financial literacy and responsible behaviour from a young age, we equip the next generation with the tools they need to thrive in an increasingly complex financial landscape. They learn not only how to save and spend wisely but also how to plan, invest, and borrow with foresight and discipline. In doing so, we help shape confident, informed, and independent individuals who are better prepared to make smart financial decisions throughout their lives.

Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions made based on this content.

Sunil Agithakaliya, Chief Operating Officer, CRIF High Mark