How to Help Your Teenagers Open Their First Checking Account is a post originally published on: Everything Finance – Everything Finance – Its all about Money!
When it comes to teaching our kids, finances are a big part of the life lessons we should be imparting. However, this topic can be vast and wide. Therefore, it can be difficult to figure out where to begin. One of the best places I suggest beginning is with a basic checking account. This is something we all end up needing as adults. So it makes sense to teach your teenagers about checking accounts while they are still under your roof seeking your guidance. Therefore, here are some of the best ways to help your teenagers open their first checking account
Bank Account Features
First off, since your teenager is still technically a minor, you will need to look for checking accounts that can be set up as joint accounts. Usually, these accounts will only allow one parent and one child to be named on the account. And for most banks, once your child turns 18, they can fully take over the account and your name can be removed. This is the type of account you want to look for.
Depending upon your teenager’s preferences will help determine whether they want a fully online bank or a brick and mortar option. Most brick and mortar banks also have an app and online features. But not all of them are completely caught up to the digital times, so this is something you will want to keep an eye out for.
It is usually preferable to find a bank that will also let you set up a savings account for your teen at the same time. In most cases, you will have the capability to set up the savings account as a backup for overdraft so your teen doesn’t end up accruing overdraft fees. But, in order for this to work, they will have to have some money to put into the savings account as a buffer.
If your teenager has taken on side hustles or gotten their first job, then some of that money could fund their savings account cushion. You could also help by depositing some funds of your own as their buffer. Each situation will be different though, so choose the path that works best for you both.
No matter what, some of the features that most teenagers should look for in a checking account are:
- No monthly fee
- Electronic deposits
- No monthly minimum balance requirement
- Online transferring
- No ATM fees
- Online bill pay
- Automatic account conversion to adult account
- Interest accruing account (if you can find one)
Great Bank Options for Teenagers to Open Their First Checking Account
Once you and your teenager have narrowed down their banking style and preferences, then comes the time to start the search. Finding the right bank for both of you could potentially take some time. If you already have a great bank that offers joint checking options for teenagers, then I would suggest starting there. But not all banks will offer this sort of account. And some of them that do don’t really have great options and may have too many fees. So, check with your own bank first and then move on if they aren’t a good fit.
I am, personally, a huge fan of credit unions for checking and savings accounts. They typically have a lot of no fee accounts and higher interest rates than the traditional big banks do. But, not all of them are caught up on the times with regard to highly intuitive apps. Since we were already members of a credit union, and they offered joint teenager accounts, that is the path we chose to pursue.
Our teenager’s checking accounts do accrue interest on their monthly balance at 0.10%. I realize this does not sound that high, but before COVID-19 hit, the rates were much better. Heck, even our high yield savings account, which is completely online, has gone from an interest rate of 2.65% down to 0.50% because of COVID-19!
While this is a great option to help teenagers open their first checking account, it doesn’t mean that it will be who they choose to stick with as adults. A big reason is because of how archaic our credit union still is with their app functionality and lack of a lot of online options.
Other Awesome Teenager Checking Account Options
However, if you aren’t a member at a credit union, there are still a ton of other great options for you to consider for your teen.
Some of the best checking accounts for teenagers on the market right now are:
- Alliant – This is another completely online option, but it will give your teenagers a 0.25% APR. They also have no fees, no minimum balance requirements and over 80,000 free ATM’s to withdraw money from.
- Capital One – This account is completely online, no-fee, no minimum balance requirements and has an APR of 0.10%. Also sends parents text notifications of every transaction so you can track what they are doing.
- Chase Bank – No monthly service fee if their is at least one direct deposit per month. A lot of online options and parental controls available, but also have brick and mortar branches.
- USAA – This is for families in the military and the account has no fees or minimum balance requirements. It also automatically converts at age 18 to an adult account. They also have a combination of great online options via their app and brick and mortar branches.
These are some great tips to help your teenagers open their first checking account!
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First Checking Account for Teenagers Summary
No matter what, it is our job, as parents to teach our teenagers how to make it in the world. And by helping them understand how a checking account works now, we are only helping to set them up for potential financial success.
Just remember to talk to your teenager about their preferred banking style first. Then begin to look through all of the features your current bank may offer. If the bank you are with doesn’t end up being the best fit for your teenager, then it’s time to look elsewhere. And there are plenty of awesome options out there for your teenager’s first checking account.
Be clear in your communication and the bank account chosen can help propel them further in their financial education. Now that is what I call a parenting win!
How did you help your teenagers open their first checking account and what were the determining factors with your choice?
How to Help Your Teenagers Open Their First Checking Account is a post originally published on: Everything Finance – Everything Finance – Its all about Money!
Source: everythingfinanceblog.com
