The Advantages of a Checking Account for Kids

Opening a checking account for your child might sound scary, but it’s the best way to teach them how to manage their money. Starting early has long term benefits for their financial education, especially as they start their first part time jobs or head off to college. Here’s what you need to know about opening a checking account for your kids.

Can a Child Have a Checking Account?

Yes! Children and teens can have joint checking accounts shared with a legal adult. These accounts require that both you and your child be listed on the account to access it.

Not all financial institutions offer accounts for minors. Those that do set their own minimum age for a child to open an account, usually somewhere between 12 and 17 years old. They may also restrict account features based on age.

Should I Open a Checking Account for My Child?

Opening a checking account for your child or teen is an important step in helping them become responsible, independent adults. You can think of your joint account with them like training wheels for learning personal finance.

Teach Your Kid to Budget

Budgeting is a tough skill to learn unless you have money to manage. Whether your kids deposit their allowance, money from a lemonade stand, or paychecks from their first job, seeing their balance grow and shrink will help them develop long-term saving and spending goals and discourage impulsive spending.

Help Teens Learn How to Use Banks and Credit Unions

Using a bank or credit union isn’t intuitive for every kid, and tagging along with you may feel like a chore instead of a learning opportunity. But having their own account will help your child feel more invested in learning how to speak with tellers, use ATMs, or navigate mobile banking apps so they’re ready to do those things on their own when the time comes.

Establish a Financial History

A checking account won’t reflect on your child’s credit score but can demonstrate financial responsibility when the time comes to take out an auto loan or open a first credit card. A child who understands how to spend within their means is less likely to have bad credit as an adult.

Let Your Teen Make Mistakes

This one sounds scary, but hear us out! Even the best teens mess up sometimes. Making mistakes and learning to fix them is an important part of growing up. As an authorized user on your teen’s account, you’ll be able to monitor their spending, discuss their habits, and show them how to correct mistakes — helping them avoid more costly financial mistakes in the future when they’re on their own. 

If you’re especially concerned about your child overdrawing their account, you can start with a prepaid debit card and graduate to a checking account when they’re ready.

Raise a More Independent Child

You want to give your child more independence as they mature, especially as they become a teenager. With a checking account, they can take on more responsibility for their day-to-day expenses like fueling their car, going out with friends, or paying for hobbies.

How Do I Open a Checking Account for My Child?

To open a checking account for your child, you’ll need basic information about them. You’ll also need to provide information about yourself. Be prepared to provide:

• Your child’s full name
• Your child’s Social Security number (SSN) or individual taxpayer identification number (ITIN)
• Your child’s driver’s license or another state issued ID (if possible)
• Your SSN or ITIN
• Your driver’s license or another state-issued ID
• A bill proving your address
• An initial deposit into the new account

Although some financial institutions will let you open an account for your child online, you can always open an account in person if you have questions or want to compare account options.

This can be a great opportunity for your child to meet bank or credit union staff and pick up age-appropriate brochures on personal finance topics.

What Features Should My Child’s Checking Account Have?

There are a few features you should look for if you’re planning to open a checking account for your child:

• Parental monitoring. You should be able to monitor your child’s account online or through an app at any time. If your child is younger, you might want an account that offers parental controls like setting limits per transaction and transaction alerts.
• No fees. Your child won’t have a good first banking experience if their money is eaten up by maintenance and ATM fees. If possible, look for a free checking account that also waives overdraft fees. 
• No minimum balance requirement. The point of a checking account is for your child to be able to spend money when they choose to. Unless they have a steady job, they may struggle to both use their account and maintain a minimum balance.
• Mobile app access. A mobile app is the easiest way for your child to monitor their account regularly. It will also make it easy for them to deposit occasional checks or transfer money to their savings account.

The Takeaway

Your child’s first checking account is a big step. With the right tools and a little guidance from you, they can begin building smart money skills that will last a lifetime.