Opening a savings account for your child

It might be a good idea to teach your child early on why it is important to save money. While minor children, under 18, cannot open a savings account by themselves, you can help them set one up. You can do this by opening either a custodial account or a joint account. 

A custodial account is the child’s property but it is managed by you, the parent, until the child turns 18. With a joint account, both you and the child are owners of the bank account. A joint account can later be converted into only the child’s account. Learn more about opening a joint account. 

To open a bank account for your child, you will need to bring the following to the bank:

• Your child’s name, birth date and social security number 
• Your picture identification, such as a driver’s license or passport
• Your social security number
• Personal information such as address, phone number, email address
• An initial deposit (cash, checks) as required by the bank

Some extra things to keep in mind:

• Children’s savings accounts often have no monthly fee and no minimum balance requirement, but you should double-check the terms and conditions just in case.
• There are limits to how often you can transfer money between accounts or the number of times you can make withdrawals. You should check with your bank to make sure you know about these limitations.

Opening a checking account for your teen

Maybe your teen has taken up a part-time job or is looking ahead to their life after high school. Whatever the reason, you might be looking to open a checking account for them. 

A checking account is another bank account that allows you to store money. Different from a savings account, it also provides easy access for using your money. A checking account usually comes with a debit card and check-writing privileges. Some accounts have monthly minimum balance requirements and charge service fees. You should check with your bank to be aware of these fees. 

Like with a savings account, you can do this by opening either a custodial account or a joint account. Learn more about opening up a checking account. 

Building your child’s credit score

Your child does not need to be 18 years old to start building their credit. While a person must be 21 years old to get a credit card on their own, there is no legal minimum age for adding a child as an authorized user on one or more of your credit cards. 

If you add a minor to your credit card, it can help build the child’s credit score if your credit card company reports the card’s payment history to the credit bureaus. You should double check with your credit card company that they do file such reports. 

It is important that you only add your child to your credit card if you plan on making regular, on-time payments, otherwise you could hurt their credit. It is also very important that you teach your child the responsibilities that come with having a credit card to avoid a negative credit score.

It is possible to search for a credit history for anyone over the age of 13 using the AnnualCreditReport.com online tool. Federal regulations allow consumers to order one free credit report annually from each of the three credit bureaus (Equifax®, Experian® and TransUnion®).

Financial literacy resources

If you want your child to learn more about financial literacy, it may be a good idea to have them take a financial literacy course. Hands on Banking has a free financial literacy course that is free and can be completed one’s own pace. They also have a helpful glossary with terms. Youth for Youth also has a financial literacy course that is free. 

Additionally, Money Under 30 is a website that provides easy-to-understand information on getting a credit card, investing, paying off debt, buying a car and more. For information on earning, spending, tracking and more, you can visit The Mint.