Finding the Best Checking Account for Kids
Many of the life skills we need every day aren’t taught in school. You’re not born a natural at knowing how to save for the things you want to do. A checking account is a great way to teach teens financial literacy. Since products and services vary by location, we’ll tell you about what principles to look for in a checking account for kids and teens.
Why A Checking Account for Kids
A checking account is a way to instill independence and responsibility in your teen. There’s no substitute for learning how to quantify your goals and break them down into meaningful milestones (e.g., how many Starbucks it costs to go to the music festival). You may also find it becoming an unavoidable necessity as they gain more privileges and need to pay for meals, textbooks and gas. Your teen might have to split the bill when out with friends or cover their share of a ticket, and with a debit card your teen can make peer-to-peer payments through a product like Zelle.
You didn’t get them a debit card so you’d have more things to pick up after. One way you can avoid potential headaches is looking for accounts with overdraft protection. Additionally, many accounts let parents track their teen’s spending through notifications. This also covers when funds are low or when an eBill is ready. Teens who are new to billing will appreciate the automated bill notifications, and these features will encourage independence while giving you peace of mind that you didn’t just hand your teen a blank check.
Many banks now offer educational portals with money management tools. This can range from budgeting calendars to tips on saving for college or a car. These seem attractive when vetting the different accounts available, but if your teen is someone who has to learn by doing, they might not take advantage of this free info.
Conversion & Potential for Growth
What will become of the account when your teen ages out of it? You want a checking account that can grow up with your teen. There are accounts that aren’t dedicated to students but make a good starting point. Bank of America offers a joint checking account for parents and teens as well as resources about planning for college.
Chase offers discrete high school and college versions of checking accounts. If you have a college student, PNC Virtual Wallet Student has student-friendly tools like a financial calendar as well as Parent Alerts. And after six years it converts to a regular Virtual Wallet account.
When it comes to security, responsibility and convenience, online banking is great because your teen can access it anytime, anywhere. Also, it can be a matter of safety making sure your child or teen can make purchases or withdraw cash if they’re out or traveling. So, you want to look for a bank with a large ATM network. This will also help your teen avoid extra fees incurred from withdrawing from an outside bank.
Low or No Fees / Minimums
You want a checking account that’s uncomplicated, no frills and no catches. And many teens are short on cash and likely don’t have much to make a minimum deposit. Accordingly, many starter accounts for minors offer no monthly fees and smaller minimum deposits. Wells Fargo’s Teen Checking Account, like comparable accounts, has a $25 minimum deposit and $0 monthly fee. CapitalOne’s MONEY, their checking account expressly for teens, has no fees or minimums.
Competitive Interest Rates
One of the primary reasons you got your child a checking account is to introduce them to the idea of saving and investing. So it follows that you’re probably on the hunt for good interest rates. One account you may have missed is Alliant Credit Union Teen Checking. This account offers an incredible interest rate of .65% APY. Well above the national average, this rate is highly competitive.
Many accounts grant parents certain privileges over their child’s account. The High School Checking account from Chase Bank requires an adult to link their account to their teen’s. The Youth Checking Account from USAA lets parents set ATM/debit limits and transfer and deposit privileges for their child.
It’s Never Too Early to be a Finance Guru
Navigating new expectations with your teen can be challenging. Whether they’re still babysitting and making friendship bracelets or saving for college, set them up for success with the right checking account. Watch them blossom into a smart saver and help them reach their goals.