When should I open a checking account for my child?
Many parents establish a savings account for their child early in life in order to save birthday money or a part-time job paycheck. But what about a checking account? When is the best time to add one to my child’s list of responsibilities? Most would say the best time to add a checking account is early in the teen years, but the real answer, however, is when your child has demonstrated an acceptable level of maturity concerning the money they have been entrusted with thus far.
What do I need?
A teen checking account can help guide your child in the right direction before poor spending habits become the norm. Since you, as a parent, will likely have to co-sign for your child’s checking account, this can be an account that the two of you can handle together. You’ll both have access to the account information, including the ability to monitor transactions. This will allow you to review check payments, withdrawals and other activity before it’s gone too far off track.
To open an account you will need:
- Your child’s Social Security number and date of birth.
- A picture identification, i.e. your driver’s license.
- Personal details such as your address, email address, and date of birth.
- Your initial deposit, including cash or checks.
What about a debit card?
A debit card is an additional responsibility that comes with a checking account. Any time your child uses their debit card, a given amount will be deducted from the funds in their checking account. It’s critical to explain the risk of overdraft and the consequences that accompany it. They should also be aware of the risks they open themselves to should they lose their card or have it stolen. They should immediately report the loss of their card to the issuing bank and never write down on paper or verbally share their PIN with anyone.
As a parent, you want your child to be able to handle their finances in the most effective way possible. A saving account is an excellent head start, and a checking account is a wise follow-up. It’s never too early to get started on their financial education, and these products are the stepping stones that will serve as the foundation for their success.