Opening a Bank Account for Your Child: What You Need to Know
A part-time job can be a rite of passage for teenagers. It introduces them to the working world and gives them their first practical experience as an employee, along with their first source of income. That means it’s also time to open a bank account if they don’t already have one.
“Earning money for the first time can be very exciting,” said Clint Welling, TruBank President. “Choosing where to keep that money can be just as exciting. And it’s a perfect opportunity for parents to provide an important financial lesson for their kids by helping them choose a bank account.”
Opening both a checking and savings account provides children with the practical experience of managing income and saving for the future.
With a myriad of options available, knowing where to open a bank account can be tricky. Involving your child in this decision will introduce them to banking and give them more ownership of their account. The Federal Deposit Insurance Corp. has a Bank Checklist to help you choose where to bank. Some things to consider include:
- Individual Ownership – Does the bank allow a minor to open an account on their own or do they require the parent as a co-owner?
- Monthly balance requirements — Does your child need to have a minimum amount in their account to avoid a monthly fee?
- Overdraft and ATM fees — Does the bank charge overdraft fees or offer overdraft protection? Are there fees for withdrawing money from an ATM?
- Fee waiver policies — What are the bank’s policies regarding fees that may be charged to an account holder and under what conditions may a fee be waived?
- Mobile banking features — Does the bank have a mobile app? What features are included?
The good news is that TruBank offers an interest-earning Youth Savings account that is ideal for kids. The Youth Savings accounts is for anyone under the age of 18 to help introduce the concept of banking and managing & saving money. There is no minimum balance requirement to open or maintain. The account allows six free withdrawals per month while any withdrawals in excess are charged a $1 fee. Parent(s) or guardians may wish to be included on the account, but it is not required with TruBank. Parent(s) or guardians can also include their child’s account with their own online and mobile banking account so everyone can help watch the account.
The days of owning a piggy bank may still be a viable option as nothing is more satisfying than seeing the coin jar fill up! It is important to begin teaching children the right way to save and spend so they get started on the best path to financial success.