The fundamental principle of teaching kids to save money from a young age cannot be overemphasized. Parents must take a hands-on approach when it comes to the value of money.
They have to know from early that life is more likely to treat you well when you have money in the bank. Accumulating lots of money does not happen in a month or two; it’s done over time.
A sound financial footing begins when the child is young and can set aside a nest egg through parents’ support and direction, whether through a custodial account or the joint account method. They learn to save and realize it’s smart not to spend more than you earn.
Even if they are banking from allowances, birthday gifts or doing odd jobs after school or on weekends, they are learning the fundamentals of life that will serve them well in the future. Let’s explore what the best accounts are for kids under 18 currently.
8. Custodial Bank Accounts
This is an account for minors under the age of 18 years old. The Uniform Gifts to Minor Act (UGMA), and the Uniform Transfers to Minor Act (UTMA), allow parents or guardians to open accounts for minors. Although UGMA and UTMA allow a range of assets, most banks will allow cash-only transactions.
The account belongs to the minor, and until he is of age, the parents act as custodians or appoint an institution (most likely a bank) to act on their behalf. The custodian can use funds from the account for higher education purposes, but not the day to day expenses. The account will pass to the minor at full maturity by law.
7. Joint Bank Accounts
Married couples or those in a committed relationship can have joint accounts. So minors and their parents can have joint accounts too and use them as they see fit.
Parents have control over the account with the minor, as the minor is, of course, too young to handle financial matters on their own, and the parent will fund the account. This account is mainly for day-to-day use and short to medium-term savings.
If you can resist the temptation to make a raid on the account for minor uses, it can be of substantial help for a college fund, buying the child’s first car, etc.
6. Capital One MONEY and Checking Account
For those flexing their financial muscle for the first time, this is a fee-free and paperless account for kids ages 13 to 17. No minimum or ongoing balance is required. All the accounts come with a debit Master card, with no option to pay bills electronically or by check.
A myriad of budgeting and balancing-tracking features come with the Money Teen account. An account holder under 18 is permitted to withdraw only $500 daily, whether PIN, non- PIN or ATM withdrawals.
5. Wells Fargo Clear Access Banking
The teen-friendly Wells Fargo accommodates teens from 13 to 17. If you are under 16, however, you’ll need a parent to be a joint owner. It’s a general-purpose checking account with low balance requirements and no maintenance fees for kids learning to budget. It yields no interest, so it’s not a rainy-day savings plan.
You are likely to pay a fee of $2.50 if you are making an ATM withdrawal at a non-Wells Fargo ATM. It is fee-free through the Wells Fargo app or their online website. You’ll need a minimum of $25 to open your account, and there is no requirement to have an ongoing balance.
4. Chase First Banking
The bank offers a joint parental account for kids with stringent measures to teach them the basics of firm financial management. The Chase bank acts as a training wheel for your child, just like their first training bike. They guide them through their first money management process, with all the controls to prevent any discrepancies.
Kids are given a customized debit card using those same controls to monitor the cardholders. Parents can tell where they are and how much they are spending. They can put a cap on the card if they think the kids are spending too much and in one place. And they’ll need $25 to open their account.
3. Alliant Credit Union Kids’ Savings Account
The Alliant Credit Union requires only a $5 minimum for an opening balance! You also receive a 0.55% yield on your balances. That’s some good news! Your child is only eligible once they reach 13 years of age, but they can hold the account as long as they want.
All account transactions are subject to parental reviews and direction. This is to help ensure that the account holder cannot abuse the account before it ripens.
2. Captical One 360 Kids Savings Account
There is no age limit for kids to access accounts at Capital One. It’s another high yield account of 0.30% and requires no opening deposit! It’s an online savings account with an automatic savings-plan option for a younger kid to start saving.
No minimum balance is required, and you set up your savings goals without raiding the balances. There is sure to be a lump sum when the child is of age!
1. The PNC Bank ‘S’ is for Savings Account
This kids’ bank is a fee-free account for kids under 18. There is a $5 maintenance fee waived if the account holder is under 18 or if the account maintains a $300 daily balance or receives a $25 transfer every month.
This is an account for younger kids. It offers a savings program where parents save for their kids’ future. A $25 deposit and requirement balance is required, and your yield will depend on your balance.
It’s time for parents to take a closer look at their kids’ financial future if you haven’t done so as yet. This venture will take burdens off your shoulders later when they’re entering college or getting their own apartment. Go open a kid’s account today!