How to open a kids’ bank account in 5 steps

You must be at least 18 to open a bank account alone, so to give your kids their first account, you’ll be adding your child to the account as a co-owner. Many traditional banks require kids to be at least 13 to be a joint owner, but there are many online options that accept ages under 13.

While your child will need your help to open their first account, doing so can help ease your child learning practical money management skills they need in adulthood. Kids’ accounts are becoming increasingly popular, too, with about 49% of teens opening bank accounts, according to a recent Fidelity study.

Step 1: Choose the right account

The account you choose will depend on your goals and your child’s age. For example, most kids’ checking accounts require minors to be at least 13 years old, while prepaid debit cards for kids typically don’t have any age limits.

6 types of banks accounts for kids

• 1. Checking

  Designed for everyday expenses, kids’ checking accounts are typically free and have spending and withdrawal limits to avoid splurging. These accounts are often for teens aged 13 to 17 years old, and some examples include Chase First Banking and Axos Bank First Checking.

• 2. Savings

  Kids’ savings accounts are great for any age. You can start building your child’s savings as soon as they’re born, and an example includes the Alliant Kids Savings Account.

• 3. Prepaid debit cards

  These kid-centered accounts are known for extra perks, like flexible parental controls, chore and allowance tracking and financial literacy education. And as a bonus, they typically don’t come with any age restrictions. Some examples include Greenlight and BusyKid.

• 4. Custodial accounts

  Made to save for your kids’ future, many custodial accounts, such as UGMA and UTMAs, are controlled by the parent until the child reaches the age of majority. Once they’re an adult, they can access the account and use the funds as they wish.

• 5. Education savings accounts

  529 savings plans and other education savings accounts allow parents to save for a child’s college education, but they can also be used for elementary and secondary school expenses.

• 6. Trust funds

  These accounts allow parents to save up a nest egg for their child. Some trust funds can earn interest and hold stocks, bonds, cash and other assets. There are also investment accounts, such as UNest which is a mobile app that helps parents start investing for their kids.

Step 2: Compare fees and transfer options

Depending on the account you choose, cost is a major factor. Some of the more advanced kid bank accounts come with extra features — like investing platforms and chore tracking — require monthly subscription fees, usually around $3 to $10 per month. This can put a dent in your finances if you have more than one kid.

On the plus side, there are free checking accounts for kids under the age of 17. These are often found at traditional banks and credit unions.

Besides monthly fees, look out for these extra costs:

• Account closure fees
• Card replacement fees
• Overdraft or nonsufficient funds fees
• Cash deposit fees
• Out-of-network ATM fees

Another major factor is the ability for you to transfer funds to your child’s account. If your kid doesn’t have any income, you’ll need a way to send them funds so they can actually use the account. Be sure to look into ways you can easily (and cheaply) transfer funds, such as Zelle transfers, ACH transfers or cash deposits.

3. Apply for the account

The way you apply for the kids’ bank account depends on the institution you’re going with. Some banks don’t offer online bank account applications, since an adult needs to be present to set up a child’s account — and that often means you’re required to visit a branch with your child to apply.

If the bank account allows you to apply online, it should take you less than 10 minutes to complete. Make sure you have all your documentation and information ready.

Most kids’ bank accounts will require:

• Your child’s name, birthdate and Social Security Number (SSN)
• Your SSN and government-issued ID, such as a driver’s license or passport
• Residential address, phone number and email address
• Your child’s student ID if you’re opening a student bank account

4. Open and fund the account

In many cases, you’ll need to fund the account during the final stage of the application process. Some accounts require an opening deposit, often ranging from $25 to $100.

Once the account is opened and funded, you can activate your debit or ATM cards, if available. This card usually arrives in the mail seven to 10 days after your application is approved.

5. Set up app and virtual cards

Many kids’ banking services offer virtual cards that can be added to digital wallets for immediate use, such as Apple Pay if your kid is over 13 or Google Pay if your kid is 16 or older.

If you’re banking with an online kids’ bank account, they’re likely to come with an accompanying mobile app. Several of today’s most popular bank accounts offer apps with a multitude of extra features. Your child may use the app to check their balance, play educational games or track their chores. Parents can also use these apps to monitor spending activity, transfer funds or set up spending restrictions.

Which kids’ bank account is best for your kid?

7 things to consider before opening a bank account for your kid

Keep these factors in mind when looking for a bank account for your child.

1. Age account changes. Many banks convert kids’ accounts to standard accounts once the child turns 18, and these adult accounts often have monthly fees.
2. Earns interest. Most kids’ accounts earn a negligible amount of interest, but a few earn competitive APYs.
3. Financial literacy features. Most checking and savings accounts for kids don’t offer financial literacy options. If you’re after an account that teaches your kid how to manage money, look at prepaid cards for kids.
4. Age requirements. Many savings accounts and prepaid debit cards are open to children of any age, but checking accounts are often only available to teens.
5. Monthly fees. Most savings accounts for kids are free to open and maintain, but checking accounts and debit cards commonly have recurring fees.
6. Debit card. Depending on the account type, your child may be eligible to receive a debit or ATM card they can use to spend or access funds in the account.
7. Balance requirements. Kids’ checking accounts may require a minimum balance to keep the account open or avoid monthly charges. Some savings accounts have a similar requirement to start earning interest, but most don’t.

A kid's account might be subject to the kiddie tax.

There can be tax implications for any unearned income, including interest, dividends and capital gains. Once your child's bank account starts earning interest, their investment income is subject to the 'kiddie tax'. Any investment earnings over $2,300 are taxed at the rates that apply to trusts and estates. This kiddie tax applies to investment income of children under 19 years old and full-time college students under the age of 24.

— Bethany Hickey, Writer, Banking and Loans.

Should I open a bank account for my kid?

Here are some signs your kiddo is ready for their own bank account:

• They’re asking for money. If they’re constantly hitting you up for cash or your credit card, a kids’ debit card lets you transfer funds instantly.
• They’ve asked for a debit card. Ads for kids’ debit cards are all over TV and social media. If your kid is curious about getting a card, they may be ready for the responsibility.
• They have an allowance. If you pay your child a weekly, biweekly or monthly allowance or pay them for completing chores, popular bank accounts for kids offer chore and allowance tracking features.
• Your teen has a job. Once your teen has entered the workforce — even if only for a few hours a week — they’ll likely want a convenient way to deposit, spend and save their earnings.
• Your kid wants to save. If your child wants to save for long-term goals, look for an account that pays interest or lets them create several subaccounts for savings.

What’s the best age to open a bank account?

Many experts agree that age 12 is the best age to introduce a kid to a bank account with a debit card.

“Age 12 is a good benchmark to start getting them used to tracking their spending and paying by card — not to mention keeping hold of the plastic without losing it,” Nate Tsang, founder and CEO at WallStreetZen, told Finder.

But you could start younger than 12 if you feel your kid is ready. By age seven, kids can understand basic financial concepts, such as money conversions and how to save money for large purchases, according to a University of Cambridge study.

If ages 12 and under feels too young, you can start teaching basic financial literacy, and at the very latest, it’s a good idea to get your kid a bank account when they start working. Most Americans agree that once a teen is 15, they’re ready for their first job, according to a PR Newswire Harris poll. A kids’ bank account makes it easier for a working teen to safely store their hard-earned money.

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A third of kids have a linked account

Just as many parents say that their kid has their own bank account as one that is linked to their own.

Bottom line

Kids’ bank accounts are offered by a wide range of US banks and credit unions. Opening an account with your current financial institution can help save time, but it’s worth shopping around to see which account offers the best rates and features. To find the best fit for you or learn about other kids’ accounts, check out our kids banking guide.