Introduction

In today’s digital age, most adults rely on checking accounts and debit cards for everyday spending. Kids’ checking accounts offer the same convenience and flexibility, allowing parents to send money, track spending, and teach responsible money habits. In this article, we’ll explore how to set up a checking account for kids, the features of these accounts, and other ways to teach kids money management.

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 your current bank or credit union to see if they offer accounts for kids. The setup process may be easier if you’re an existing client.

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. 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 the 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 both 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: These 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

Teaching kids about money management goes beyond just setting up a checking account. Here are some additional ways to instill good financial habits:

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.

Contact O1ne Mortgage for Your Mortgage Service Needs

At O1ne Mortgage, we are dedicated to helping you with all your mortgage service needs. Whether you’re looking to buy a new home, refinance your current mortgage, or need advice on managing your finances, our team of experts is here to assist you. Call us today at 213-732-3074 to speak with one of our experienced loan officers. We look forward to working with you!