How do you open a bank account for a minor? What are the benefits of opening an account for children and how do you get your kids interested in financial topics?
As many parents believe that opening a bank in a child’s name can build financial literacy, they use it to introduce topics like budgeting, saving, interests, and more. Parents can make personal finance fun, approachable, and easier to digest with a bank account.
Let’s take a closer look and answer how do you open a bank account for a minor and the steps to take toward financial literacy.
How Do You Open a Bank Account for a Minor?
So, how do you open a bank account for a minor? Even though the age to open a bank account varies, many institutions offer accounts specifically for minors, but often with a few caveats. That means the first step is choosing the right bank account and the best institution.
Choosing the Right Bank or Financial Institution
When choosing the right place to open a bank account for a minor, there are a few things to consider. First things first, look at the fees. Understanding monthly maintenance or overdraft fees associated with the account could help prevent any surprises in the future.
Interest rates might also be a key consideration as they can impact the amount of money the account could accumulate over time. If your goal is to teach financial lessons to your children, interest rates are going to be a valuable opportunity.
Another factor is the financial educational tools that the banks or institutions offer. Some offer resources and tools that can help cultivate healthy financial habits and teach children about money.
Depending on where you live, your schedule, and your goals, convenience, and availability of the institution’s branches might be an important element. However, you should never underestimate the value of online banking services, their apps, and more. Not only can online or mobile banking be more convenient, but it can also make financial lessons more accessible to the younger generations.
Finally, some banks or financial institutions offer bank accounts specialized for minors. These bank accounts can have features like spending limits, parental controls, and more.
Gathering the Right Information
Once you know where you’re going to open the bank account, you’ll have to gather the right information. Even though all the information you’ll need will depend on the financial institution you choose, many have a similar checklist.
Typically, minors can use a social security card or birth certificate as their primary ID. As the parent or guardian will serve as a shared account holder, they will also need to provide some information.
For U.S. citizens, permanent residents, and non-U.S. citizens, there are many acceptable forms of identification. These can include a driver’s license, social security card, state-issued ID, US military ID, passport, and more.
How Do You Open a Bank Account for a Minor
With your documentation in hand and your banking decision made, the next step is opening the account. Depending on the type of account and the financial institution itself, you might be able to open the account online. However, some might require you to do it in person at a local branch.
As a shared account holder, you should know that there might be some account-specific factors to consider. For example, the account you choose might have minimum deposit rules or the parent or guardian already has to have an account with the bank. Before you visit the bank, it’s a good idea to inquire about these factors to ensure there aren’t any speed bumps in the process.
Also, if you’re opening the account in person, you need to bring the necessary documentation for both you and the minor. If you’re opening it online, you will need to fill out an application and provide digital copies of the documents.
How to Get Kids Excited About Banking and Finance
Now that we’ve answered how do you open a bank account for a minor, it’s time to see how to get them interested in it. While there are many potential benefits to opening a bank account for a child, perhaps the greatest one is the opportunity to teach them financial responsibility and money management.
That said, no matter the age of your child, that might seem like a daunting task because most kids aren’t interested in financial topics. However, with the right tools and lessons, you can make the entire subject more approachable and engaging. Here are just a few of our suggestions.
#1 Teach Them Why Saving Is Important
The way adults think about and handle money is pretty much set in stone at a young age as most financial habits and attitudes are shaped early in childhood. By teaching them important financial lessons early on, they’ll be able to make better financial decisions later in life.
When you teach kids about saving and budgeting, they will be able to avoid debt and other financial problems down the line. What’s more, by learning about money, they’ll also be developing essential life skills like critical thinking, decision-making, and problem-solving.
#2 Give Incentives
If you want your kids to learn in an engaging way, incentives like matching funds and interest might be a good idea. First, you should show them how earning interest works and then start applying those lessons in real life.
#3 Build Complexity
Even though young kids might not be able to read bank statements and reconcile accounts, preteens and tweens might be. Also, getting a first job would be the perfect time to start learning about taxes. When it comes to financial lessons, it’s important to build complexity over time and keep up with current trends and topics.
#4 Download BusyKid
Apps like BusyKid can prove to be the perfect teaching tools to easily break down complex topics. Budgeting, saving, and even investing are all lessons kids go through with the BusyKid app.
With the BusyKid app, families have access to countless useful features and can streamline the chores to allowance process.
Not only that but to encourage financial lessons, parents can also get the BusyKid Spend Card. With the debit card, you can take your kids’ spending freedom to the next level and give them the edge for success.
Scan to get BusyKid!
* BusyKid Spend Card is issued by MVB Bank, Inc., Member FDIC, pursuant to a license from Visa®️ USA Inc. Cliq® is registered ISO/MSP of MVB Bank, Inc. All cardholders funds are insured by the FDIC in accordance with the FDIC’s applicable terms and conditions. For more information about your card terms and conditions including the VISA Zero Liability policy go here. Cliq®️️ is registered ISO/MSP of MVB Bank, Inc.
