Tips for teenagers opening a bank account

It is very important to have a bank account as a teenager. It might seem like a novelty at first, but it is actually a very important step in learning about financial responsibility. Opening a bank account will give teenagers a first hand lesson in being responsible and diligent with their spending. Just doling out cash whenever they ask for it is not going to help in any way. They need to have a fixed income in the form of an allowance and they should learn to save a little every month so that they can spend it on special treats. But another good thing about this is that by the time the kid reaches to age where he or she has to get into college, they would have quite a bit of money saved up in the bank and they can afford to pay for a portion of the tuition on their own. It’s basically a car fund or a college fund which will grow in proportion as they age.

How to choose the right bank

Almost all banks have specialized accounts for teenagers. They will in all probability start out as teenage bank accounts and with time they will transform into regular bank accounts when the teenager comes of age. And they will also be issued ATM cards to go with the bank account at the beginning itself. This will help in ease of operation. You will need to choose a bank which eases the entire process of deposit and withdrawal.

Depositing checks or paying bills on time is not something that teenagers will do regularly on time every time. You will need a bank that understands this and provides for direct online deposit or auto drafting capabilities. This allows their deposits to go into their accounts automatically without them having to carry a physical check to the bank every time. But apart from all of this, one of the most important things for a teenager is to have a bank account that has no annual fees requirements.

Annual fees for banks can put a big hole in the savings of a teenager, since they will be earning small amounts of money for very long periods of time. But if the fees are a percentage of the investment, then it is okay. You will also need an account without minimum balance requirements. This is because most of the time, the kid might have lesser than ten dollars in the account and he or she would not want to be laden with fees for that reason. Also have the overdraft option removed, because a kid might go on a shopping spree and then realize that he or she has spent a thousand bucks on clothes! And the parent will end up footing the bill.

Opening the account

In most accounts the teenagers cannot open bank accounts if they are below the age of eighteen. In such cases, the parent might have to co-sign on the account. But in other banks, the teenager can open the account on his or her own with just some basic information and identity proof. Once you set up the account, start making a habit of putting regular deposits in it and not withdrawing all of it at one time.