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What’s the Best Checking Account for My Teen?

best checking accounts for teens

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When you want to teach your kids how to save money — and how to spend it — one good way is to open a bank account for them.

If they are under 18, legally you will likely have to hold the account jointly with them.

Before the proliferation of technology, it was considered a rite of passage to set up a checking account for your teen before they went to college. ATMs were not invented yet, and they would need access to money and the ability to pay for items while they were away.
Many teens found writing their first check made them feel like they were finally adults! And bouncing their first check likely dismayed them the same way it does when it happens to parents. That’s one reason careful money management is so important.

Checking Accounts for Teens in 2019


Today, even though we don’t write nearly as many paper checks as we did years ago, a checking account is still useful for teens because they can get a debit card to make purchases in stores.

Like bouncing a check, it is possible to overdraw on your account if you swipe too many times without keeping track of what you are buying. So it’s important to teach teens to keep track of their account balance and to always leave a cushion in case they make a mistake. The cost of bouncing a check is about $30 today, plus the fee you have to pay to the merchant, which is usually about the same. This is a lot of money for an adult, and it can feel astronomical to a teen working at a minimum-wage job.

According to Bankrate, many account holders don’t even know they have overdraft protection. This service allows you to continue to use your debit card after you run out of money in your account. This can be handy if you want to avoid the embarrassment of having your card declined or the frustration of not having access to cash from the ATM. But each transaction comes with a fee, often on par with the fees for bouncing a check. This makes for an expensive temporary loan.

Teen looking down
Money management skills are helpful throughout life.

Some customers would prefer to have their card declined and avoid the fee. If you incur these fees and you want to halt your overdraft protection, simply contact your bank. However, another alternative is to link the account to a savings account or a credit card.

Many teens have savings accounts, although not as many have credit cards. Linking either of these to your checking account allows the bank to transfer funds when the balance runs low in the checking account. The fees for this service are traditionally much lower than for an overdraft.

Teaching Teens How to Save Money

But will this serve your goal of teaching your teen about money management? Or thwart it?

Before you open an account, think about what you hope to achieve with it. Does your teen get an allowance or have a job? Have you earmarked a percentage of their income that must be saved or put limits on how much they can spend or what they can spend it on?

Person swiping a credit card at a store
Monthly statements provide an easy way to track transactions.

Although debit cards can sometimes make it seem too easy to spend money — and certainly credit cards can — they also allow you to track your expenses in a way that’s difficult with cash.

Plenty of adults wonder at the end of the month where all the money went, and if you have a printout of where you used your card, it’s easier to answer this question. Then cardholders have the opportunity to weigh whether they are happy with the amount of money they spent on iTunes or lattes or lunches out and they can plan if they want to do things differently next month.

Best Way to Save Money with a Checking Account

Once you’re sure you want to open an account with your teen, you need to shop for the best deal. What should you look for?

  • Minimum balance: Many banks will charge for a checking account that falls below a minimum balance. If your teen does not yet have enough saved up, are you willing to keep some of your money in the account to avoid fees? And do you trust your teen not to spend it if you do?
  • Interest rates: While you want the highest interest rate you can get, they are all so low on checking accounts that the difference is likely to be negligible. Interest rates on savings accounts are hovering a little below 1 percent these days, and checking accounts are even less.
  • Fees: Check out what fees a bank might hit you with for a checking account. Low balance fees, ATM usage fees, overdraft protection and more can drain the account quickly.

Money management is a critical skill too many people never learn. The sooner you can teach your teen how to save money, the better off they will be. For more tips on managing and saving money, sign up for our newsletter now!


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