Best Checking Accounts for Teens

Understanding finances at an early age is an important step toward a good financial future, and bank accounts for kids are an important part of that equation. For example, teaching teens how to manage checking accounts will help teach them the basics of finance and set them up for a better relationship with money.

Benzinga researched the best checking accounts for teens and found that those on the list below offer great perks and benefits.

Best Overall: Alliant

Alliant offers a teen checking account that allows parents to monitor their teen’s spending habits and restrict those habits that could get them in trouble. For instance, parents are joint owners with teens and can monitor all transactions and set up transaction alerts to better monitor their spending. Teens aged 13 to 17 can open these accounts, and the credit union will restrict their transactions to $100 in ATM cash withdrawal and $300 in spending. To earn the APY listed above, the teen must opt-in for electronic statements and receive one electronic deposit to the account each month.

To become a member of Alliant, you must meet one of these parameters:

• Be a current or retired employee from one of Alliant’s U.S. partners
• Be a domestic partner or immediate family member of a current Alliant member
• Live or work in one of the communities near the credit union’s corporate headquarters in Chicago

If you don’t meet any of these requirements, you can become a member of Foster Care to Success (FC2S). The organization requires a $5 membership fee, but Alliant will pay that on behalf of its new members.

Best for Managing Money: Current.com

Current.com is a financial app that makes the concept of managing your money that much easier. Teens and adults can both use these accounts, making it possible for the family to work on money management together.

While this isn’t a traditional checking account, it allows you to:

• Sign up quickly
• Get a debit card in short order
• Spend and save
• Earn points on every purchase
• Set up direct deposits for even your child’s work paychecks
• Get paid 2 days early
• Use ATMs for free across America
• Get your gas hold refunds back almost instantly

Remember, adults you can sign up for free, but there’s a yearly fee when you want your teen to have an account you can monitor. It also works well for divided families because more than one adult can monitor the account at the same time.

Best for Interest Rates: Connexus Credit Union

Connexus makes it easy for parents to teach their kids about money with the Connexus Credit Union Teen Checking Account. Its high APY makes this a great credit union to show teens the magic of compound interest. And the mobile app lets tech-savvy teens practice their financial skills using the technology they are comfortable with. The only drawback to this credit union is you have to be a member. To qualify for membership see more here. If you don’t qualify for membership within these parameters, you can donate $5 to the Connexus Association. The money will be used for financial education.

Best for ATM Network: Navy Federal Credit Union

If you or a family member is a member of the armed services, Navy Federal Credit Union offers a great checking account for teens. The Navy Federal Credit Union Free Campus Checking Account is open to people aged 14 to 24.

To become a member of this credit union, you or a family member must meet the membership requirements outlined on the website.

Best for Future Planning: Citizens Bank

The Citizens Bank Student Checking Account is for people who are 25 years or younger. You can be 18 years old and open an account of your own, or if you’re 17 years old, you can open an account by yourself if you do it in person at a branch, or with a joint account holder if you open the account online. If you are younger than 17, you must open the account with a parent or legal guardian as the joint account holder.

If a savings account is open alongside the checking account, the bank offers help with financial planning such as tips about how to save for college or a first car. The Citizens Checkup allows students to speak with qualified professionals about planning their financial future.

Best for No Fees: Capital One

Capital One offers a teen checking account that allows parents to monitor every transaction their teen makes. In addition to parental monitoring, the bank restricts transactions for teens along with the places the young account holders can spend their money. For example, teens cannot spend money at car rental establishments, liquor stores or online prescription drug stores. Teens 13 and older can send up to $500 via Zelle but only with the consent of the joint adult owner. The adult can also restrict a teen’s ability to use Zelle. Teens under 18 can withdraw $500 a day at ATMs or signature-based debit card purchases. Older teens (over 18) have a limit of $5,000 a day. Parents can lower the limits for any age teen by calling the bank and making those arrangements.  If your teen wants an online checking account to manage their finances, Capital One offers all of its services online.

Features to Look for in Checking Accounts for Teens

Bank accounts for teens offer certain features that you won’t find in other checking accounts. While most parents will talk to their teens about how to manage their finances, a bank or credit union that offers educational resources about checking accounts is an added bonus.

Here are some of the features to look for in a checking account for teens.

1. No Minimum Deposit

Most teens don’t have a lot of money to open an account with a high minimum balance, so looking for a checking account with no minimum deposit can help. Even if your teen has $20 from their last babysitting gig, they can open a checking account with some banks and credit unions.

2. APY

One of the best reasons for opening a checking account with your teen is to teach them about finances. And one of the most lessons in finances is compound interest. Finding a checking account that will pay them the best checking-account interest rate possible helps demonstrate compound interest to young kids and teens, although at today’s low rates, the gains are minimal.

3. Fees

Many banks and credit unions wave fees for teens because they understand that young kids are just starting out and learning how to manage their money. Look for a checking account that does not charge overdraft fees or monthly maintenance fees, but explain to your kids that once they are an adult, they will likely have to pay these types of fees.

4. Parental Controls

As the parent of a kid or teen that is just starting to learn about finances, parental controls on checking accounts can give you peace of mind. The banks that offer them allow parents to control how much money their kids can spend and whether they can use Zelle or other apps that allow them to transfer money to others. Some banks and credit unions allow parents to receive notifications every time a transaction is made on the account.

How to get Approved for a Checking Account for Teens

1. Know the Age-Related Rules

Each bank or credit union has rules about how minors can set up a checking account. Some allow 17-year-olds to set up an account in person at a branch while others require an adult joint account owner to set up the account. Research the rules for setting up an account with the banks before deciding whether it’s the right account for your teen.

2. Online or In-Person

Some banks allow parents and teens to set up an account online while others ask that teens set up accounts at a local branch. Talk with your teen about whether they prefer to do their banking online or in person at a local branch and then select the bank or credit union based on that. Once you’re decided, submit your application to the financial institution.

3. Fund the Account

Once you decide on the bank or credit union, it’s time to find the account. You can do this online if you plan to transfer funds from your account to the teens, or if the teen has cash from odd jobs or an allowance, you may have to do it in person.

4. Set up Parental Controls

Now that you’ve set up the account, it’s important to set up parental controls. You can monitor your teen’s account to ensure they’re using it correctly. Also, you can set some limits to make sure they don’t get in trouble. For example, you can restrict the amount of money they spend per day and decide whether or not to allow them to use Zelle.

How you can Improve Your Finances

As your teen begins to understand how finances work, you can speak to them about managing money in a way that builds their credit score. Here are some tips for your teen (and you) that will help build finances.

1. Pay Bills on Time

Paying bills on time is a great way to build a credit score. Teach your teen that they should pay bills as soon as they come in to avoid accidentally making a late payment. Talk to them about setting up automatic payments from their checking account.

2. Savings

Having a savings account is another topic of discussion that teens benefit from. If you teach them the importance of having a savings account in case of an emergency, it will go a long way in helping them build a good financial base. For instance, you can talk to them about what would happen if they needed to buy a new tire for a car. If they had a savings account, they would not have to charge the tire and it would save them in interest.

3. Investing

Talking to youth or teens about investing helps set them up for good future financial habits. Talk to them about their options and make decisions together about what’s right for them.

4. Debt

Talking to your kids about debt and the negative effect it can have on their lives is an important part of their financial education. Stress the importance of not having a lot of debt and teach them about the debt-to-income ratio. As they get older, they will remember these lessons and use them to build a good financial foundation.  

5. Teach Kids About Spending Wisely

There was a time when opening a bank account for kids was difficult. Parents pulled together change and aded a few dollars, went to the bank and got started. These days, kids can manage money using something like the Greenlight Debit Card. As a parent, you can register for a Greenlght card, give it to your child and deposit money as needed. 

Your child(ren) use the card just like any other debit card, and they can easily access their allowance, money they earned through a job or take payments for babysitting, etc. Greenlight also features budgeting and financial education resources. Kids learn how to do more than just deposit and spend money. Parents never need to worry about lost cash, and kids have just as much spending power as adults.

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