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Most adults don't use cash for everyday spending. Instead, we tend to rely on a checking account with a linked debit card. Kids' checking accounts offer the same convenience and flexibility. They may allow you to send your child money, track and restrict their spending and more. It can also help teach them responsible money habits.
Kids' checking accounts vary from one financial institution to the next. Here's how they typically work, along with the steps for opening one.
How to Set Up a Checking Account for Kids
1. Choose an Account
Every kids' checking account is different. When comparing them, pay attention to the following:
- Basic account features
- Minimum age requirements (some checking accounts are available to kids as young as 6)
- Fees
- Overdraft protection
- Mobile banking options
- Customer service reviews
- What happens to the account when your child turns 18
Shopping around can help you find an account that feels like the right fit for you and your child. Some financial institutions require parents to have an account before opening a kids' checking account. Check with whatever bank or credit union you already use to see if they have accounts for kids. The setup process may be easier if you're an existing client.
Find Digital Checking Accounts
2. Open the Account
These accounts are typically structured in one of two ways: The parent may own the account and grant their child permission to have a linked debit card, or the parent and child may be co-owners. That would put the account in both of their names. Either way, many kids' checking accounts can be opened online. You may choose to go into a physical branch if that's an option. You'll likely need some following documents to get started.
Parents will need:
- Valid government-issued identification
- Proof of residency
- Social Security number
- Contact information
Kids will need:
- Birth certificate or Social Security card
3. Add Funds
Check with your financial institution to see if they require a minimum opening deposit. This might range anywhere from $25 to $50. Also keep in mind that it may take up to a week for your child to receive their debit card. You can link your checking account to your child's account to easily add funds as needed.
What Are Some Features of Checking Accounts for Kids?
Kid-friendly checking accounts can be useful for parents and kids. Some common features include access to:
- A debit card: Instead of carrying cash, which can get lost or stolen, your child can use their debit card. If they do need cash, most kids' accounts provide ATM access.
- A spending tracker: Easily see where your child is shopping and how much they're spending. You can set up account alerts for real-time updates.
- Spending restrictions: Some kids' checking accounts allow you to put a cap on how much your child can spend, where they can spend and how much cash they can take out of an ATM. You may also be able to lock and unlock their debit card.
- The opportunity to send your child money: You can transfer money to their account whenever they need it or after they've earned their allowance.
- Online banking and apps: That can allow your child to request money from you, accept transfers into their account and monitor their account balance.
Other Ways to Teach Kids Money Management
- Teach your kids about budgeting. Whether it's their allowance or money they're earning from an after-school job, your child may be managing money for the first time. A budgeting app can be a simple way to teach them how to work with their income and expenses.
- Emphasize saving. If your child has their eye on a big-ticket item, encourage them to gradually save. Show them how to budget for the future and set up automatic transfers to their savings account. This will also teach them the fundamentals of building an emergency fund.
- Introduce them to investing. Some personal finance games are great practice for investing. You and your child can play with mock investment portfolios, trade pretend stocks and track hypothetical investment scenarios. Gamifying the experience can get them excited about investing.
- Teach them about credit. Talk to your kids about credit cards and how debt can affect their credit score. You can even grant them a loan and have them repay you with interest to show them how debt payments work.
The Bottom Line
A kids' checking account can help your child manage their money responsibly. Most come with helpful tools that make it easy to track their spending, check their account balance, request money from their parents, receive transfers and more. Parents can also stay on top of their child's spending and put extra guardrails in place.
Your child shouldn't have a credit report if they're under 18. If they do, that could be a red flag for identity fraud. Setting up a free credit freeze is a simple way to protect your child's credit health.