$200 savings baby bonus - Westpac rewards kids born in 2017

They might not know it, but newborns across the nation are in for a savings surprise with Westpac announcing a $200 contribution to the savings account of any baby born in 2017 who has an account opened in their name.

The ‘Bump’ initiative hopes to give the next generation of Aussies a financial head start and help them become more savings savvy said Chief Executive Consumer Bank at Westpac Group, George Frazis.

"Setting up our future generations for success will help Australia to thrive. Teaching children to save from an early age is known to have a positive impact on future financial stability, so we're encouraging all parents and grandparents to help kick start this learning process and help them start preparing for a brighter future on this new year's day,” he said.

According to Westpac’s latest Financial Future Report, 86% of parents and grandparents believe that opening a savings account for their children will engender good habits and set them up to be successful later in life.

With over 70% of Australian children under the age of five having a savings account in their name, Frazis highlighted the benefits of an early savings scheme.

"By building on an initial $200 deposit at birth with a $20 contribution every week, for example, will potentially amass approximately $19,000 in savings by the time the child turns 16.”

“That's a significant financial head start for any child and can be put towards future education, life experiences such as a gap year or a deposit on a first home,” he said.

The report found that 66% of parents were concerned about their children’s financial awareness upon leaving high school, perhaps learning from their own experiences as 74% of those interviewed wished their own parents had set up a savings account for them at a young age.

"We've listened to parents and grandparents and believe the Bump Savings account will demonstrate the benefits of long term savings to young people, so by the time they turn 16, they might consider continuing to save their money,” said Frazis.

The ‘Bump initiative’ is part of Westpac’s 200th birthday celebrations, with the bank expecting over 75,000 newborns across the country to be signed up to the offer.