Choosing the Right Bank Account for Your Kids

Finding the right kids bank account is just as, if not more important, than your own financial accounts. Here are some tips to find the right kids bank account.
 

Teaching your children important financial lessons is nothing new. In fact, it’s a topic we’ve talked about before, especially around what age you should be thinking about opening a bank account for kids. 

But it’s not just about when. Not sure where to start? We’re here to walk you through it.

How Old is Your Child?

The best place to start is to think about what makes the most sense for the current ages of your children. A savings account is always useful for kids of any age, even when they’re babies. Did they receive some money from the grandparents or other family members? Put it into their own account, and they could have a significant amount by the time they reach their teens.

By around 9 years old, most kids are starting to understand the concept of money and may be ready for an allowance. Since it’s likely they won’t have too much in cash at that point, they probably won’t need an account for another few years.

When your child is around 14 or 15, though, opening a teen checking account is a good starting point for discussing responsible money management and daily spending. This is also a great time for them to open an account of their own if they’re starting to earn money from extra chores, babysitting, or other small jobs.

What is the Purpose of the Bank Account?

Opening a kid’s savings account is a good first opportunity to teach your children about money and the important financial lessons they’ll carry into adulthood. 

Having their own account teaches them the value of a dollar and how to save for the things they want. Savings accounts are also a good way to teach older children how interest works, along with setting financial plans and goals.

Once your teen is ready for a checking account, you can introduce them to concepts like basic budgeting and managing expenses. You can also help them understand the value of a dollar in terms of what everyday items cost.

Local vs. Online Banking

There are plenty of options to choose from when opening a bank account for your child. 

During their formative years, you’ll likely find that a local bank offers perks that an online bank doesn’t. For instance, taking them to a local branch to open an account and deposit their money can be a memorable experience and an important life lesson. Seeing where their money is going is more impactful than simply clicking online.

By visiting a local bank, your kids can better understanding the process. Not only is this helpful as they grow up, but it’s also more fun for them! Choose a local bank where you have your own accounts and have an established relationship, or switch to a bank that treats you and your kids like family.

Finding the Right Bank Account for Your Kid

There are several bank accounts that will be a good fit for your kids besides those designated as kids bank accounts. Here are a few things to consider when deciding which type of account will be best for your children.

Checking Accounts for Kids and Teens

Most standard checking accounts will be great for teenagers. They may not come with all the perks that a premium account does, but for what they’re using it for, a standard account is plenty to get them started.

Look for an account with no monthly fees or minimum balance required since they probably won’t have large sums moving in and out of their account on a monthly basis, even if they have a part-time job. If a minimum opening balance is required, check that this is small—around $20-30.

A standard account should also give you a debit card for teens to use when out and about, as well as online banking options so that they can access their account information at any time. If your teen has a smartphone, look for a bank with an app to manage their finances. This is a great opportunity to discuss online information safety, like setting strong and unique passwords and not sharing account information with anyone. 

If you’re concerned about debit card safety, look at digital options such as mobile wallets and contactless cards. At First National Bank and Trust, all of our checking accounts come with these features to make using a debit card safe and convenient.

Savings Accounts for Kids

As with a checking account, you’ll want to make sure any savings accounts you open for your children are simple with few restrictions.

Look for accounts with no monthly fee, low minimum balance requirements, a low minimum balance to open the account, and, if possible, any special perks for kids. At First National Bank and Trust, our First Savers Kids Club membership includes prizes for making deposits and cash for good grades.

We love to make saving fun for kids, so we created a savings club just for them that provides reward incentives to help them save more.

Other Bank Accounts to Consider for Kids

Once your child has their first account, there may be other accounts you want to consider before they open a checking account as a teenager. A 529 College Savings Plan* can be helpful for college savings, especially if you open one for them when they’re very young. You could also consider a certificate of deposit for any funds you’d like to save for them in the long term and earn more interest on.

As your child becomes a seasoned saver, encourage them to open a money market account to earn more interest on their deposits. Once they enter the world of work as a teenager, opening a Roth IRA* is an excellent idea so that they can benefit from compound interest on retirement savings as early as possible.

What Do You Need to Open a Bank Account for Your Kids?

When you’re ready to take your child to a local bank to open their first account, there are a few important items you’ll need to bring with you, including:

• Their social security number
• Your driver’s license or photo ID
• Your social security number
• Any required initial deposit for the account

Open a Kids Bank Account Today

Whether it’s a first savings account for the new addition to your family or a checking account for your teen when they start working, First National Bank and Trust is here to help. 

Come in and visit any of our convenient locations throughout Southern Wisconsin and Northern Illinois and our team will help you open an account. We’ll treat you like family from the moment you walk through our doors or, if opening an account online works better, as soon as you click to apply.


* Check the background of our investment professionals on FINRA's BrokerCheck.

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