Teaching our children about finances is an essential part of life education. This subject is broad, and knowing where to start can be challenging. A good place to begin is a basic checking account, something all adults need. As a parent, helping your teenagers understand checking accounts while they’re still at home is beneficial. Here are some tips to assist your teenagers in opening their first checking account.
BANK ACCOUNT FEATURES
Start by finding a joint account suitable for your minor. These accounts usually allow one parent and one child per account. Then at 18, your child can assume full control. This kind of account is what you should aim for.
Consider your teenager’s preferences to help decide if they’d prefer an online bank or a physical one. Most brick-and-mortar banks offer apps and online services, but some are not completely digitally adapted.
It’s also preferable to choose a bank that allows you to set up a savings account simultaneously for your teen as a buffer against overdraft fees. This requires initial funds to start the savings account.
Consider your teenager’s income from side jobs or their first employment to fund their savings account. You can also contribute some money. Select the option that suits your situation best.
Key features teenagers should consider in a checking account include:
– No monthly fee
– Electronic deposits
– No monthly minimum balance requirement
– Online transfer options
– No ATM fees
– Online bill pay features
– Automatic adult account conversion
– Interest on account (if available)
BANK ALTERNATIVES FOR TEENS’ FIRST CHECKING ACCOUNT
Once you’ve considered your teenager’s banking preferences, it’s time to find the right bank. This could potentially take a while. Start by checking out your bank’s facilities if it offers joint accounts for teenagers. If not, explore other options like credit unions which often provide no-fee accounts with higher interest rates than traditional banks. Keep in mind that not all offer high-tech banking apps.
For instance, my credit union offers a joint teenagers’ checking account with an interest rate on their monthly balance. Although 0.10% may not sound high, it was much better pre-COVID-19 when interests were much higher.
Your teen may not stick to the same bank as an adult, especially if the bank’s online banking options are lacking.
PROSPECTIVE TEEN CHECKING ACCOUNT OPTIONS
Several other options exist if you’re not a member of a credit union. Some of the best checking accounts for teens available are:
– Alliant – An entirely online option providing 0.25% APR, no fees, no minimum balance, and access to 80,000+ free ATMs.
– Capital One – A fee-free online account with 0.10% APR, no minimum balance, and provides text notifications for all transactions.
– Chase Bank – No monthly service fee with at least one direct deposit per month, plenty of online and physical branch options.
– USAA – Specially for military families, no fees, automatically converts into an adult account at 18, offers excellent online banking and physical branches.
CHECKING ACCOUNT SUMMARY FOR TEENS
It’s the duty of parents to prepare their teenagers for financial independence. Introducing them to checking accounts is a step towards potential financial success.
Start by understanding your teen’s banking preferences, then review the services of your bank. If your bank isn’t the right fit for them, consider other options. Engage openly with your teenager and the chosen banking channel will further their financial education. A well-educated teenager in financial matters is indeed a parenting win!
Have you assisted your teenagers in opening their first checking account? What factors played a crucial part in your decision?
