Do you remember how old you were when you had your first bank account?
Money management should start early for kids. Make trips to the bank with them — and make them a big deal — beginning at age 6. Help them open a savings account, and use that experience to introduce different money concepts, like how they’ll earn interest by leaving their money in the bank.
Good news: Many big-name banks offer accounts for kids, and lots of them are low- or no-fee.
How to Open a Bank Account for Someone Under 18
While a minor can have a bank account in their name, an adult must open the account. So a parent or guardian can open a joint checking or savings account with their child.
Some accounts cater to young children, while others focus on teens. Different banks and states may also have rules about the age of a minor on an account, so you’ll want to do your due diligence.
For the most part, you can open accounts online or in person. Bank requirements will vary, but you typically need your child’s Social Security number, passport or birth certificate, in addition to your own identifying information.
What You Should Look for in a Bank Account for Kids
Before deciding on an account, you’ll want to consider the following:
- Is there an initial deposit required?
- Is there a monthly fee?
- Is there a daily balance requirement?
- Is there a service fee?
- What is the interest rate for the savings account?
- Are add-ons (checks, debit cards, etc.) available?
Other features may be important to you — say, the ability to transfer money into your child’s account as often as you want.
6 of the Best Bank Accounts for Kids
We stuck to checking and savings accounts at big banks with plenty of locations around the United States. Some accounts are known as UTMAs, which stands for Uniform Transfers to Minors Act. In these types of accounts, gifts of high value (money, real estate, etc.) “can be transferred to a custodian for the benefit of a minor,” according to the U.S. Social Security Administration, until the child becomes a legal adult. The savings are tax-free for the minor until they assume the account. But the assets are considered part of the custodian’s estate and are taxed accordingly.
Here are six accounts for those in the 17-and-under crowd.
1. Bank of America Child Savings Accounts
Bank of America offers two options for kids: a Minor Savings Account and a Custodial (UTMA) Savings Account.
With a Minor Savings Account, members under 18 have full access to their money and can set up automatic transfers. The account is FDIC insured.
In a Custodial Savings Account, minors do not have access to funds before they’re 18. However, automatic transfers can still be arranged and this account is also FDIC insured.
Minor Savings Account
Account ownership: Jointly owned by child and their parent or guardian
Minimum initial deposit: $25
Minimum daily balance: $0
Monthly service fee: No fee for a child under 18 (After they turn 18, the account is converted into a BoA Advantage Savings Account, where fees do apply.)
Custodial Savings Account
Account ownership: The parent or guardian acts as a custodian for the minor’s account
Minimum initial deposit: $100
Minimum daily balance: $500
Monthly service fee: $8/month if there’s no minimum daily balance of $500 (if there is, the fee is waived)
2. Chase High School Checking
Chase offers a checking account for kids in high school. While there aren’t many extras available — no overdraft protection or debit card options — this is a great, no-fee account for those just getting started. You can sign up for a general savings account, too.
Chase High School Checking
Account ownership: Jointly owned by child (13 to 17 years old) and their parent or guardian, and the account must be linked to their parent/guardian’s Chase account. At age 19, the account becomes a Chase Total Checking account.
Minimum initial deposit: $0
Minimum daily balance: N/A
Monthly service fee: $0
Additionally, if your minor is at least 17 and heading to college, Chase is offering a $100 bonus for opening a new Chase College Checking account. Your teen can redeem the offer online and they’ll receive the money after following a couple of easy steps. (Psst, mom and dad — this is another teachable moment for your teens since they have to be organized and follow the required steps to earn this money.)
3. PNC Bank “S” is for Savings Account
This PNC savings account is a UTMA account, and it aims to help children learn about finances through “Sesame Street.” The “Sesame Street”-themed learning center is an interactive experience for kids, who can learn about goal-setting; saving, sharing and spending; and even receive money tips from Elmo and gang.
You can set up automated savings with this account, and it’s also no-fee after the initial deposit.
PNC Savings Account
Account ownership: The parent or guardian acts as a custodian for the minor’s account
Minimum initial deposit: $25
Minimum daily balance: $0
Monthly service fee: $0 if the account holder is under 18
4. Wells Fargo Way2Save Savings Account
The kids savings account offers free online transfers between Wells Fargo accounts and free online statements to help teach minors about money management.
Wells Fargo Way2Save
Account ownership: Joint ownership, “minor by” or UTMA/UGMA (Uniform Gifts to Minors Act)
Minimum initial deposit: $25
Minimum daily balance: $0
Monthly service fee: $0 for members under 18 (19 in Alabama)
FROM THE BANKING FORUM
5. TD Student Checking
TD Bank offers a checking account for those ages 17 through 23. Members can take advantage of instant-issue debit cards, and parents can order a TD Go Reloadable Prepaid Visa Card to help their student-age kids spend responsibly.
TD also offers a number of online guides for personal finance education, from building your credit to using a budget worksheet.
TD Student Checking
Account ownership: Jointly owned by child and their parent or guardian
Minimum initial deposit: $0
Minimum daily balance: $0
Monthly service fee: $0 if you’re under 18
6. Capital One Kids Savings Account
This straightforward, no-fee account from Capital One offers a 1% APY. You can establish automatic savings plans and savings goals so your kids can watch their balance grow.
Capital One Kids Savings
Account ownership: Jointly owned by child and their parent or guardian
Minimum initial deposit: $0
Minimum daily balance: $0
Monthly service fee: $0
Bonus: Your Local Credit Union
It’s always worth checking out your local credit union to see what they offer for minors. They may be able to offer more personalized service, an account with a higher APY or other perks.
Why You Should Open a Bank Account for a Kid
It may be tempting to hold on to your children’s money for them in your own account or let them keep it in a piggy bank. But it’s a good idea to open up a bank account for them for several reasons. Opening a bank account can:
- Help kids learn the value of money, from saving to spending it.
- Help them understand compound interest and how it makes their money grow.
- Help them learn to delay instant gratification by saving toward a goal.
Opening an account is also a great way to teach, or reinforce, good budgeting habits.
Kathleen Garvin (@itskgarvin) is a writer and editor whose work has appeared in U.S. News, Clark.com and Well Kept Wallet.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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