Setting up a bank account for your child is an excellent way to not only teach them the importance of financial management, but to also plan for their future. Almost every bank offers bank accounts that are specifically for children. The accounts usually require both the child and parent’s names to be placed on the account, which gives extra security by preventing children from using the account without parental consent. Here are some of the many types of bank accounts for kids that are available at varying ages:
You can start a bank account for your child as soon as they are born. These accounts are usually savings accounts and are intended to help save money for the child’s future. Parent and child names will appear on the account and the parent is considered the account holder.
If this account is primarily for education purposes, it should be established when setting up the account that it is an education savings account. This will also give tax benefits to you while saving for your child’s college education.
This type of account is geared towards younger children, of primary school age. Each bank will have it’s own name for this account type. These accounts are excellent for teaching young children about saving money. Both yours and your child’s names are placed on these accounts. Just like a regular bank account your child can deposit and withdraw money. Restrictions on the account can require parental consent for transactions.
Once your child in old enough to have a job and handle their own finances their bank accounts can be transitioned into teen accounts. Teen accounts leave it up to the account holders whether or not parents are still on the accounts. If you want to be involved in your teenager’s spending habits, online bank services can enable you to view the information so you can help to guide them accordingly.
College/University Student Accounts
Upon graduating from high school and turning 18 your child will be able to set up their own checking and savings accounts. If a previous account is being transitioned it is a good idea to remove your name from the account to make sure your child doesn’t run into problems accessing their accounts while away at school. At this point in their lives your child should know enough about banking to manage their own accounts and to be financially responsible.
Children’s bank accounts are a great way to teach kids how to save money. They are also excellent resources for parents who want to set aside some money for their child on a regular basis and an ideal place for children to keep birthday/allowance money. As a parent, it is important to check your child’s bank account so you can ensure that they are wise with their finances.