4 Things to Consider When Opening Your Child’s First Checking Account

Author: Johnnie Medrano, Vice President, Regional Operations Manager 08/26/2021

Opening your child’s first checking account is a major milestone and can mark the beginning of your child’s personal financial journey. Using a checking account can be a good way for your child to establish healthy saving and spending practices early in life.

Before opening a youth checking account, parents should open a youth savings account first. Having checking and savings accounts that exist simultaneously will help your child avoid overspending and they’ll learn the importance of saving for future circumstances. They’ll also be prepared to make good financial decisions when they receive their first check.

The following are four items to consider when opening your child’s first checking account.

Consider the Fees

Many youth debit programs don’t charge maintenance fees. However, it’s important to confirm this when you’re opening your child’s checking account. You’ll also want to ask about costs associated with using local or out-of-network ATMs and whether the account is subject to overdraft fees. Depending on the age of your child, the bank may require joint ownership of the account, meaning you could also be held liable for any applicable fees.

Focus on the Features

More than likely, the bank will issue a debit card when they open your child’s checking account. The features of the account you choose can help your child learn to responsibly manage their money by dictating what they can and cannot do with their new card. Some accounts allow parents to establish spending limits on the card or other limitations that stop their child from overdrawing the account.

The account you choose may also give your child access to services such as Zelle, which allow them to securely transfer or receive money through approved recipients. And since Zelle doesn’t utilize a virtual balance, funds that your child receives appear in their account within a few minutes of transfer.

Prioritize Mobile

Mobile banking can be especially helpful for younger generations who are familiar with staying connected digitally. Mobile banking can help your child deposit checks, monitor their account balances, or make purchases on their phone through a mobile wallet. Utilizing mobile banking tools can also help children watch for potential fraudulent activity while learning the importance of privacy and keeping their information safe.

Because many youth debit accounts require joint ownership with a guardian, mobile banking tools can also benefit parents who want to monitor their child’s balance on-the-go.

Use it as a Teaching Tool

A child’s first checking account should be viewed as a teaching tool for families to bond over financial literacy. Parents should make time to talk with their child each month to review their account statements. Even just a few minutes of planned discussion can help develop healthy attitudes and practices toward money management, preparing your child to pay bills in the future or save for other endeavors.

It’s just as important for children to learn financial literacy as their parents. Many parents who are decades into their financial journey have become more informed by teaching their child the difference between needs and wants, debit compared to credit, and other financial habits. By utilizing your child’s first checking account as a teaching tool, you can help them become more self-sufficient and maintain your household’s good financial practices.

Banking with Your Child

Establishing a checking and savings account for your child can empower them to take control of their finances later in life. The earlier you begin talking to them about money, the better you can prepare them for the future.

For more information on starting your kids on the path to financial success, call a PlainsCapital Bank representative at 866.762.8392.

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