Learn About Setting up Checking Accounts for Kids
More and more teens have access to checking accounts, debit cards, and even credit cards than before. This is not just banking; this is a plan that parents have begun to adapt to equip their children with a financial background before they need it. By utilizing banks that have teen programs, parents can help their child to establish a banking and a credit history while still under their roof. If any problems arise, the parents are there to guide and direct the teen towards making a sound financial decision before managing a checking account on their own.
Parents can monitor the bank accounts as well as set ATM limits while allowing their teens greater freedom to make decisions. By opening a checking account for teens, parents are setting their children on the right financial path. There are several banks with special programs aimed at teen banking. Here are a few of them as well as their criteria for accounts:
Teens from the ages of 13–17 can open a teen checking account as long as a parent co-signs the account. This account comes with a Visa debit card, and the parent can set daily limits on withdrawals and spending. This account comes with online access, free online statements, and no monthly service charge on the account.
Additionally, Wells Fargo has savings accounts and other banking products aimed at teens. Each state has regulations governing banking products, and this information is available on Wells Fargo's website.
USAA Teen Checking
Teens can open either a savings or a checking account at USAA with no minimum balance required. Teens can use their ATM cards anywhere in the country, and USAA reimburses other banks' ATM fees. There are overdraft protection options, and parents sign as joint owners on the account.
Young Americans Bank
Young Americans Center for Financial Education is geared specifically for kids and designed to teach children the proper way to manage their money, including starting businesses. Young Americans Bank is located in Denver but has provisions for out-of-state clients. They have savings accounts, checking accounts, certificates of deposit, and other banking products.
Savings accounts require $10 to open and pay competitive quarterly interest rates. The checking accounts require a minimum of $50 to open and have no monthly service charge, but they do have an overdraft charge of $12. 12 is the recommended age to open a checking account for kids.
While the Union Bank does not have checking accounts dedicated to kids, they do encourage pre-teens and teens to open savings accounts with their parents. Kidz Savings is for children ages 8–12, and the account requires $1 to open. At the age of 13, the account converts to a Teen Savings account for teens ages 13–17.
At the age of 18, the account converts to a regular savings account. These savings accounts are joint accounts with the parents, and the ATM card has a preset limit that the parents set. There is no minimum balance, nor is there a monthly service charge. The account is accessible online, and there is no overdraft fee when attached to a parent's savings account.
In addition to these banks, other banks such as Bank of America and Chase have teen programs. Parents should consult their banks about adding a teen to a current account. Credit unions and local community mutual banks are also good options for setting up checking accounts for kids. By teaching teens to handle money at a young age, they are better equipped to pass into adulthood without financial stress.