By Smarty Guest Blogger Kimberly Paulk. For more tips on kids and money, check out her blog Parents + Money.
When my son walked out the door on his first day of high school, I panicked. It seemed like yesterday he was building with Legos on the back patio and suddenly here he was, practically packing to leave for college.
It was an overreaction, to be sure. But the realization that he was getting closer to “independence day” led me to many decisions. The first one: I decided he needed to learn to manage money. That meant opening a real, honest-to-goodness checking account.
Most financial institutions have savings accounts for children, but we went hunting for something that was more “teen” and less kid-focused. I also wanted something that would give him a lot of chances–to make a budget, make a plan and make mistakes.
We found the process to be fairly painless but it would have been easier if another mom had handed me a list of some options available in our area, along with a quick rundown of her experiences.
So here’s what we did, and what we learned.
– We established a teen account at a bank where I am already a customer. I was already familiar with the statements and assumed it would make the process of transferring funds easier. In truth, online banking and money transfer apps like Zelle make it pretty easy to transfer funds between financial institutions, so look at all of your options.
– Our account opening required an in-branch visit which took about 45 minutes. Check with the financial institution you’re interested in to see if that’s a requirement. Set your teen’s expectation about the length of the bank visit and you’ll save yourself a lot of “are we done yet” moments.
– The bank will need verification of identity. Check to see what’s needed by your particular institution but the list will include things like your child’s social security number, your drivers’ license, a copy of your child’s birth certificate and student ID (if they have one).
– Interest is often not offered or rates are very low. Online-only banks often offer better rates, but I was interested in staying local and having a brick-and-mortar bank we could visit if needed.
– All of the account options listed below are joint accounts and require you (a parent or guardian) to be an account holder for kids under 18. Some banks also require that you have an account or relationship with their institution in addition to opening a student account.
– Features like online/mobile banking and debit cards are pretty standard, although there may be age limits for ATM and debit cards.
– Just because there are no monthly maintenance fees (or they are waived) doesn’t mean there are no fees at all. Make sure your teen understands fees and what will trigger them.
– Think about overdraft protection before you open the account. Having it in place can help your teen avoid unexpected fees and returned items, but some parents prefer to go without it so kids have an additional opportunity to learn to manage their money. The Consumer Financial Protection Bureau has a good explanation of the overdraft “opt in” and what it means for your teen’s debit card transactions.
– The list below includes institutions that offer an account specifically geared toward teens and students. If your neighborhood bank isn’t listed, they may still offer an account that’s perfect for you and your kid. Give them a call!
Finally, please make this part of a bigger conversation with your child about managing money. A little financial literacy will go a long way once they are flying solo!
For students under 24 years old
Minimum opening deposit $25
No monthly maintenance fee for students (high school, college, university or vocational program)
BB&T Student Checking
For students 23 and younger
No minimum opening deposit
No monthly maintenance fee
Carolina Premier Bank Student Checking
Minimum opening deposit $100
No monthly service fee
Fifth Third Student Banking
For students 16-23 with a valid student ID
No minimum balance
No monthly fee
Wells Fargo Teen Checking
Minimum opening deposit $25
Avoid the $3 monthly service fee by choosing online statements