Opening a Bank Account for Teens

What’s the Best Bank Account for Kids—and What Can They Learn Along the Way?


Talking money is still taboo for most adults and—surprise, surprise—the majority of kids are far from confident when it comes to financial know-how.

These challenges aren’t unique to U.S. families. A recent international study of 48,000 15-year-olds found that teens worldwide struggle with basic fiscal concepts. Only 12% scored at the highest level of financial literacy.1

If your teen is ready to learn this essential life skill, opening a bank account can be a great way to explore the ins and outs of earning, saving, spending and planning for the future. Here are some topics to help get the conversation rolling:

Features to Explore in a Teen Checking Account

Since minors generally can’t open bank accounts by themselves, you’ll typically need to be a joint owner of the account, which may actually be a good thing. It’ll give you the chance to compare banks and find features that are important to both of you. You can discuss pros and cons, make compromises and even adopt some new habits on this financial journey you’re taking together.

Maybe your teen wants a bank account that’s free of fees and doesn’t require a minimum balance because they’re just getting the hang of this money thing. That’s not too hard to find. But maybe you’re mostly interested in tracking their spending. An issue like that may be worth a discussion, so your child understands where you’re coming from.

For instance, there are joint teen checking accounts that allow you to receive alerts every time your child makes a transaction. But should you? When it comes to monitoring your kid’s checking account, privacy parameters will be up to you. Navigating these options together will keep the lines of communication open.

With banking apps, everything from money transfers to mobile deposits can be done in minutes. However, impulse purchases with the swipe of a debit card are just as quick. This can be an opportunity to talk about the difference between “wants” and “needs.” For most people, finding a balance takes time, and managing a bank account is one way to practice.

A teen checking account can even earn a little interest. If your teenager is among the 64% of those who earn money on their own1, they may be able to grow their money with interest.

Together, you can compare rates on checking accounts, savings accounts and even longer-term investment options like CDs. It can be an eye-opening exercise to see how your dollars may grow, depending on where you leave them.

Opening an “Under 18” Bank Account

Once you find the right bank account, you’ll likely need to provide details for you and your teen such as address, dates of birth and Social Security numbers.

While some financial institutions require you to be a parent or legal guardian, others allow anyone over 18 to be the joint account holder.

And since most parents swear that time actually flies, you’ll want to discuss what happens when your child turns 18. Will you remain joint account holders of your teen checking account or go your separate ways? Hopefully, you can make that decision together, but be aware that some banks will close or convert teen checking accounts when your child becomes an adult. So, you’ll want to ask your bank about its policy.

Bank Accounts, Budgets and Bowling Nights

As with most major endeavors, mastering personal finance takes trial and error. As your child learns to monitor their cash flow, you can help them create a budget. How much will they spend? How much will they save? What kinds of experiences or big purchases will they plan for?

Teens, just like adults, are more likely to enjoy money management if the process is fun—and there are tangible payoffs (like wings at the bowling alley with friends).

At the same time, learning to save and watch your balance grow can feel pretty good, too. Putting goals in order of importance, and even scratching others off the list, can build confidence around managing money wisely.

From saving for a first car to paying off student loans to buying a starter home, it all starts with basic banking skills. And practice, as they say, makes (something close to) perfect.



This site is for educational purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

  1. PISA 2015 Results (Volume IV) Students' Financial Literacy (May 24, 2017) Retrieved from http://www.oecd.org/pisa/pisa-2015-results-volume-iv-9789264270282-en.htm

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