Raising children entails a multitude of responsibilities, and imparting financial wisdom ranks high among them.
In today’s digital era, it is simpler than ever to open a minor’s bank account, either in-person or online. If you’re mulling over the idea of initiating a bank account for your child, you’ve come to the right place.
Let’s delve into all the aspects you should consider.
The Case for Opening a Bank Account for Your Minor

Parents might wonder about the ideal age for children to start learning about finances, but the reality is, it’s never too early.
Kids are keen observers and pick up cues from their parents’ behaviors. Hence, involving children in important financial decisions early on lays the foundation for prudent money management in the future.
Here are some compelling reasons to consider opening a bank account for a minor:
- An Active Learning Experience. Talking about money can be too abstract for children. Providing them with a bank account and involving them in real financial decisions offers a tangible learning experience, accelerating their understanding of money management.
- The Power of Compound Interest. The earlier a child starts saving, the more their money grows over time. Witnessing the magic of compound interest at a young age can set the stage for more informed financial decisions in their adult life, like investing.
- Curbing Instant Gratification. Children often struggle with the desire for immediate gratification. Teaching them the value of saving for their wants can promote mindful spending and curb impulsive buying.
- Learning Goal Setting. Goal planning is a learned skill, not innate. A savings account can be an effective tool to teach children how to set goals and work towards them.
- Building a Solid Financial Foundation. Children who grow up with savings already have a financial safety net when they start their independent journey. Regular saving habits can empower them to make smart financial decisions in the future.
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The Process of Opening a Minor Bank Account
Opening a bank account for a minor requires someone over 18 years of age.
The account opener, not necessarily the child’s legal guardian, becomes legally liable due to their name being linked to the account.
The control of the account rests with the account opener until the child reaches maturity, which is 18 in most states, and 21 in a few others.
Step 1: Research
Investigate your options before deciding on a bank account for a minor. Start by looking at reviews, ratings, and the services offered by the bank.
Try to find a bank offering high Annual Percentage Yields (APYs), low fees, and easy access for your child, including convenient ATMs.
Step 2: Apply
Most banks have a straightforward application process to be completed by you and your child.
The application will ask for basic details like your name, address, social security number, and birthdate. The bank uses this information to verify your identity against the IDs you provide.
As per the U.S. Patriot Act, banks must verify the identity of every person associated with an account. This includes verifying full names, addresses, birthdates, social security numbers, and for adults, a government-issued ID. Some banks might have additional requirements.
Step 3: Set Up the Account
Upon receiving approval from the bank, you’ll obtain a bank account number and a debit card. If you open the account in-person, you’re likely to receive everything on the spot.
However, if you choose to open the account online, the debit card and bank account details might take a few days or weeks to reach you through mail.
Step 4: Make the First Deposit
There’s something uniquely gratifying about depositing money into a bank account. The action solidifies the concept of saving and investing in one’s future.
When you’re ready to make the first deposit into your child’s new bank account, consider letting them do it in person. This creates an invaluable learning experience that they are likely to remember for a long time.
In this digital age, there’s still value in the tactile experience of handing over cash or a check to a teller, then receiving a deposit receipt in return. It’s a tangible way for your child to see their money going into the bank, marking the beginning of their personal financial journey.
If you opt for an online account, there’s still an opportunity to involve your child in the deposit process.
You can demonstrate how to transfer money electronically from your own bank account, or if they have a check to deposit, how to use the mobile deposit feature.
This not only gives them a sense of responsibility but also a chance to familiarize themselves with online banking—a skill that will be critical in their adult life.
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The Three Best Bank Accounts for Minors
The financial market is brimming with options for minor bank accounts. However, among the hundreds available, there are three that seem to be favored by many parents for their child-friendly features.
Chase First Bankingâ„ : A Comprehensive Starter Account
Chase First Banking is an excellent first step into the world of banking for children. Parents need to have a Chase account to open a minor bank account, but once they do, the service is free.
The account is designed for children between the ages of 6 and 17 and includes an array of educational opportunities to help them understand money management. Parents have complete control and visibility over the account, ensuring they are always aware of their child’s financial standing.
With over 16,000 ATMs and a range of educational tools, Chase First Banking provides a comprehensive banking experience for kids.
LEARN MORE:
See the current offer from Chase First Banking
Greenlight: A Money Management Tool for Kids
Greenlight is not just a debit card for kids; it’s also an effective teaching tool. It provides a hands-on approach to managing money, linked to a child’s chores and allowances.
One of its standout features is the real-time alerts that parents receive when their kids carry out any banking transactions.
The card is prepaid, which means parents set the limit of what their children can spend. It also allows kids to request additional funds from their parents, with the option to explain why they need the extra money.
Parents can control spending by restricting certain stores or setting spending limits. An added feature is the ability to attach a brokerage account, enabling kids to invest in stocks with parental approval.
LEARN MORE:
See the current offer from Greenlight
Copper: A Teen-Friendly Banking App
Copper is a banking app designed specifically for teenagers between the ages of 13 and 17. It provides an excellent introduction to managing a checking account, complete with a debit card.
Copper is designed to involve parents but also allows teens to feel in control of their financial activities.
The app is equipped with an automatic savings feature to reinforce the importance of saving, and it provides a user-friendly dashboard to help teens understand where their money is going and how close they are to achieving their financial goals.
A notable feature of Copper is its vast network of 55,000 fee-free ATMs.
LEARN MORE:
See the current offer from Copper
Choosing the Right Type of Bank Account for Your Minor
Before you set off on the journey of opening a bank account for your child, it’s crucial to determine the purpose of the account.
Depending on your child’s age and financial maturity, different types of accounts may be more suitable. Here’s a rundown of the most popular types of bank accounts for minors.
Checking Account: Ideal for Pre-Teens and Teens
A checking account is a great option for older kids and teenagers who have more financial responsibilities.
This type of account allows them to safely deposit their paychecks, cash, or checks, and it can help them understand the concept of budgeting for everyday expenses. A debit card is typically associated with a checking account, offering a convenient way to make purchases or withdraw money from ATMs.
Savings Account: Perfect for Long-Term Goals
A savings account is an excellent choice for children of all ages.
For younger kids, it’s a tangible way to learn about the value of money and the principle of saving. For teenagers, it can help them save for long-term goals such as purchasing a car or preparing for college expenses.
Savings accounts usually offer interest on the money deposited, which can provide an early lesson on the concept of compound interest. This can be a powerful motivator for kids to save more, as they can see their money grow over time.
Custodial Account: A Foundation for Future Investments
A custodial account, such as a UGMA (Uniform Gift to Minors Act) or UTMA (Uniform Transfers to Minors Act) account, is a type of account that parents can open for their children to save and invest money on their behalf.
These accounts can hold a variety of investment products such as stocks, bonds, mutual funds, and even real estate.
Parents act as custodians of the account until the child reaches a certain age (usually between 18 and 21, depending on the state), at which point they gain full control of the account. These accounts can be an excellent way to save for long-term goals like college tuition or to give your child a financial head start in their adult life.
Joint Account: Shared Responsibility and Control
A joint account is an option where both the parent and the child have access to the account. This can be a good learning tool, as it allows you to guide and monitor your child’s financial behavior closely.
With a joint account, you can set up automatic allowances, oversee their spending, and step in when necessary to prevent costly mistakes. On the downside, because it’s a shared account, any financial missteps by your child could potentially affect your credit.
Whichever type of account you choose, remember that the goal is to help your child develop good money habits that will serve them throughout their lives.
It’s essential to involve your child in the process and to use the account as a teaching tool for basic financial principles like saving, spending responsibly, and understanding the value of money.
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Financial Literacy: The Key to Future Success
Beyond saving and spending, understanding the value of money also includes concepts like budgeting, investing, understanding credit, and being aware of financial risks and opportunities.
As your child matures and their financial responsibilities increase, these lessons become even more critical. Here are a few ways you can continue to guide your child in their financial journey:
- Budgeting: Teach your child about budgeting by letting them handle money and make decisions on their own. For example, if they receive an allowance, help them plan how they’ll use that money. Encourage them to divide their income into different categories like spending, saving, and giving.
- Investing: As your child gets older, you can introduce more complex financial topics like investing. Explain how investments can grow over time and the concept of risk and reward. If your child has a custodial account, this can be a great opportunity to discuss different types of investments like stocks, bonds, and mutual funds.
- Understanding Credit: Introduce your child to the concept of credit early on. Explain how credit cards work, the importance of paying bills on time, and the potential dangers of debt. This can prepare them for the time when they will have to manage their own credit cards and loans.
- Financial Risks and Opportunities: Teach your child to be mindful of financial scams and the importance of protecting their personal information. At the same time, help them identify and take advantage of financial opportunities, such as scholarships, low-interest loans, or employer-matching retirement contributions.
Lastly, remember that your own financial habits can significantly influence your child. Modeling responsible financial behavior, like living within your means, regularly saving money, and making thoughtful spending decisions, can be one of the most effective ways to teach your child about money management.
The ultimate goal is to help your child become a financially responsible and independent adult. By giving them the right tools and knowledge at an early age, you’re setting them up for a lifetime of financial success.
Frequently Asked Questions (FAQ)
It’s never too early to start teaching your child about money. Even as toddlers, children can begin to understand the concept of exchange. By the age of seven, many kids can grasp the idea of saving and spending.
You can start by opening a savings account for your child. This provides a practical way for them to learn about saving, earning interest, and watching their money grow.
A checking account can be a useful tool for teaching your child about spending responsibly. You can guide them on how to manage their money, monitor transactions, and understand the importance of not overdrawing their account.
Encourage them to divide their income into different categories like spending, saving, and giving. This will help them understand how to allocate their money and prioritize their needs and wants.
Your financial behavior can significantly shape your child’s understanding of money management. Modeling responsible financial behavior, such as living within your means and regularly saving money, can be an effective way to teach your child about money.
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