Planning your child’s global future starts with your bank
As a retail banker, I'm often approached by anxious parents asking how best to prepare for their child's plans to study abroad.
Embarking on your child's international education journey is, from the outset, an emotional milestone. Don't we all remember that bittersweet feeling on their first day at kindergarten? Fast forward sixteen years, and they're ready to spread their wings. As a parent, you still feel those nervous pangs as they prepare to venture out—hope, ambition, fear, uncertainty, and pride, all rolled into one. Understandably, you want to ensure a smooth transition.
For all latest news, follow The Daily Star's Google News channel. Let's assume you and your child have already navigated the initial steps, and your child is accepted and ready to embrace the world. As the guardian, you must emotionally prepare for this significant change while also making informed financial decisions to support the journey.
While each family's experience will differ based on personal circumstances and destination, there are common banking-related considerations. Let's dive into four key considerations.
Prepare: Decide where and how to save
You might delay purchasing air tickets until closer to the university's orientation date, but financial preparation cannot wait. Building account balances over time strengthens your financial credibility and reassures institutions that you can support your child's education. A monthly savings scheme is a helpful tool for systematically setting aside a portion of your income.
Choosing the right bank to hold your savings is a long-term commitment. Consider carefully which institution's statement you'll want to present when applying for your child's student visa, and begin accumulating funds in that account well in advance.
Pre-empt: Understand foreign exchange needs
The peace of mind that comes from knowing tuition fees are paid on time is priceless. Much of this assurance depends on your bank's ability to provide foreign exchange (FX) when it matters most. Bangladesh Bank offers a mechanism called the "Student File," which allows guardians to convert taka into foreign currency to cover tuition and living expenses abroad.
Today, banks have expanded this facility to include a wider range of services for international students. It is important to thoroughly research which bank offers the best support, including processing time, available services, and remittance capabilities. Note that the first transfer can only take place after the student file is opened with the required university documents and invoices, so choose your bank wisely.
Preserve: Set aside funds for emergencies
Life in a foreign country can bring unexpected challenges. A Resident Foreign Currency Deposit (RFCD) account can serve as an emergency fund, allowing you to remit funds freely abroad. This can come in handy for unexpected expenses, holiday gifts, or even festive remittances. RFCD accounts must be funded from unspent foreign currency you've brought back from overseas trips, so the earlier you open and build your account, the better prepared you'll be.
On the topic of savings, it's also wise to help your child develop habits around budgeting and financial tracking. Teach them early to optimise spending and manage money responsibly.
Practise: Empower your child with experience
Eventually, your child will need to take charge of their finances—so start practising now. If your bank offers supplementary cards, consider issuing one with capped limits. Alternatively, open a joint account to give them hands-on experience managing funds and using mobile banking.
During family holidays, load their card with the "travel quota" so they can get used to transactions abroad. In today's digital age, online payments are becoming the norm. Helping your child gain confidence in e-commerce and card use will better equip them for responsible financial decisions later in life.
Studying abroad is not just an educational milestone—it's a significant life event that touches every part of your child's journey. Watching them leave the comfort of home can be daunting, but managing the banking side doesn't have to be. Once you've selected a reliable bank and your child is confident handling FX transactions, you've already ticked off a few key boxes on the long list of uncertainties they may face.
So, plan ahead, prepare wisely, and empower your child to chase their dreams.
Tanmi Haque is head of International Wealth and Premier Banking at HSBC Bangladesh.
Views expressed in this article are the author's own.
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