Romania’s Government plans to automatically open savings accounts at the Treasury for all children under 18.

The authorities want to encourage parents to save money for their children in these accounts by awarding a bonus of RON 600 (EUR 129) for savings of over RON 1,200 (EUR 258) per year, besides the interest of 3% per year. The interest and bonus will not be taxed, local Profit.ro reported.

The Government may thus enter a direct competition with the commercial banks that offer savings products for children.

The program, which is called gROwth – The Junior individual savings account will be launched in December 2018. The program’s argument is the need to provide a financial reserve for studies or health-related expenses, but the project includes no restrictions on how the account-holders can spend the money after they turn 18.

There were some 4.17 million children under 18 in Romania at the beginning of this year, according to official data from the National Statistics Institute (INS).

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