Teen Checking Accounts

When is a good time to open a checking account for your teenager?

teen bank 2Opening a bank account for your teen is a step towards their independence. However, it takes time, years even, for these young adults to learn how to manage their funds.   To open a bank account “with training wheels” consider a student account that is linked to the parents checking account.  Such accounts can be opened as early as in high school.

By monitoring the transactions on the students account, parents can watch the spending patterns, catch erroneous charges or question subscriptions that may have been unwittingly subscribed for.

Balance Alerts

Parents can set up alerts to arrive via text and/or email when the balance falls below a set amount of your choosing. It is possible to respond to a text alerts and transfer funds to cover the account instantly, on your smart phone, with just two key strokes.

Transfer Funds

A distinct advantage with linked accounts is the immediate availability of funds with online money transfers between accounts. You can also schedule regular transfers to your student account, perfect for paying an allowance or transferring grocery money when the student is in college.

Little tip here: transfer allowances on Mondays rather than Friday’s, your student will need to budget if they want to have money for the following weekend.  

Scenarios where a parent (yours truly) may have to transfer money at the last minute:

School book store – a text book for a class they just enrolled in.

School library – the last minute printing of a paper due in 15 minutes!

Cab Fare – when a ride let them down and stranded them.

Track Spending

Whether the student is earning their own money or receiving an allowance, it is useful for the parent to see how the money is being spent.  It’s a talking point where the student can receive guidance.  For example, when my children were in high school they all worked as lifeguards, getting a regular paycheck.  I was staggered by the amount of money they spent on food, fast food or deli sandwiches.  We talked about the wisdom of spending 1 hours pay, for sitting in the life guard chair, in the hot sun, on a sandwich?  If they took lunch from home (provided free) they could save their hard earned pay to spend it on something far more interesting and rewarding.  By showing them that spending $5 here and $7 there, on food, it amounted to a large part of their paycheck over a one week period.

In today’s world of plastic cards and online purchases, it is hard to juggle finances and keep track of spending, even for adults, unless you are very organized and write it down. Why then, would we expect our young adult children to fare any better?  The banks are counting on a linked student account to become independent account when the student graduates and have come up with a really useful product to introduce youngsters to the world of banking.

Talk to your bank about linked student checking and savings accounts. Ask about service fees, check fees (some offer a limited amount of free check processing) and overdraft charges. Subscriptions may be posted to your account, regardless of available funds, sending the account overdrawn. This is where text alerts are very useful.


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