In a world where the array of financial products and services is expanding, parents are trying to help their children master the basics and guide them in making wise decisions regarding money. Opening a checking account for kids can be a valuable first interaction with the banking world and an opportunity to start conversations about how to spend money, engage with financial institutions, and appreciate financial decisions appropriately. You may also want to link your child’s checking account to their savings account.
What is a checking account?
Checking accounts, in their simplest definition, are accounts at a bank or other financial institution that hold funds intended for everyday purchases. It is common to deposit money into a checking account after receiving a paycheck or a financial gift, and to write checks or withdraw cash to cover expenses.
How do checking accounts for kids work?
The main difference in checking accounts for kids is that the parent or guardian is usually a joint owner of the account until the child reaches the age of eighteen. Many institutions offer accounts that feature a simple and clear structure to minimize risks, and there are specific age requirements for these accounts.
Should I open a checking account for my child?
Opening a checking account for your child can open the door to life lessons. If you choose to open a checking account at a local credit union or bank branch, you can use it as a hands-on learning experience. Many banks and credit unions are happy to give a quick tour to children and teens in the branch so they can better understand what happens there.
How to choose a checking account for kids
The main things to consider in a checking account for kids are the level of parental oversight available, the strength of online/mobile banking options, the fees associated with the account, and how old your child should be to start using the account. As they approach eighteen, another important consideration is what will happen to the account at that time: will it remain open, or can they easily transition it to a different type of checking account?
How to open a checking account for kids
To begin opening a checking account for the child, you will need some basic identification. If you are already dealing with a financial institution or organization, you may be able to use your child’s name and Social Security Number (SSN/ITIN) along with student ID. If not, you will also need relevant information about yourself, which may include your name, personal identification number (SSN/ITIN), and your driver’s license or other state ID. You may also be asked to provide a bill that bears your name and address. Once you begin the account opening process, you will need a source of funds to add an initial deposit to the account.
Frequently Asked Questions
What is the best age to open a checking account for kids?
The guideline for when to open your child’s first checking account is to observe when they show an interest in learning about money and banking. If this happens early, such as at ages 6-9, you might want a checking account with strong parental oversight and restrictions. Older teenagers may ask for a checking account that closely resembles a regular adult checking account, just with a parent as a joint owner.
Should my child have a credit card?
If your child has a credit card, they may have the ability to incur overdraft fees or make unwise purchases. If either of these is a concern for you, think carefully about whether they are ready to have a credit card yet. You may want to choose an account that offers parental oversight and the ability to set spending limits until your child learns to use a debit card wisely – under your close supervision.
Source: https://www.thebalancemoney.com/checking-accounts-for-kids-2085551
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