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Knowing how to manage money is a critical life skill — which is why it's worth learning as early as possible. But you don't want to overwhelm your child with the responsibilities of a checking account before they're ready.

Let's look at what to consider when deciding whether it's the right time to open an account for them.

1. Are they 18 yet?

Teen (or student) checking accounts, designed for children ages 13 to 17, are available from some financial institutions. Despite the name, these accounts may be open to children as young as 8.

Alternatively, a bank or credit union may only permit adults (i.e., people 18 and older) to open any type of account. For example, an institution that doesn't offer teen/student accounts may instead provide the UTMA (Uniform Transfers to Minors Act) option. A UTMA is titled in the child's name and becomes active once they turn 18. UTMAs are available from The Federal Savings Bank.

Overall, you can consider ages 8, 13 and especially 18 as the main milestones for when to start a checking account for your child.

2. What do they know about managing money?

Everyone learns at their own pace. Although you may be able to co-sign a checking account for your child before they're even 10 years old, you'll want to consider if they have a good grasp of:

  • Depositing money, for example through a mobile app that can scan check images.
  • Using an ATM for withdrawals and reliably remembering their account PIN.
  • How overdrafts and minimum balance requirements (if applicable) work.
  • Swiping, tapping or inserting the physical debit/check card for the account.
  • Any fees, interest rates and limitations associated with the account.
  • General ways to access and use the account, both online and offline.

It's important to feel comfortable with your child's financial acumen. That way, you can rest easier by not having to worry about if they're spending too much or in danger of incurring fees that they didn't know about.

3. What types of accounts best meet my child's needs?

Not all checking accounts are created equal, at least when it comes to being child-appropriate. Before selecting any checking account, pay attention to:

  • Fees and service charges: Look for an account that doesn't have monthly fees or service charges — and which has a relatively low opening/minimum deposit — to keep things simple for your child.
  • Surcharge-free ATM availability: Related to the fee consideration, are there sufficient bank-affiliated ATMs nearby with no withdrawal fees?
  • Interest rates: While many checking accounts come with a 0% APY, some may offer a positive rate as long as requirements are met for opening deposits and average daily balances.
  • Mobile and online banking: These two capabilities are particularly important for younger users who may already spend a lot of their time on their phones
  • Money transfers: Sending money electronically is much easier than mailing a check or handing out cash. Make sure your child's checking account has this feature to maximize the user experience.

In other words, don't rush it. Take the time to compare the features of different checking accounts and then choose one that's easy for your child to use and for you to keep an eye on.

For more information on how to choose the right account, contact The Federal Savings Bank today.