Teaching children about financial responsibility from a young age is crucial for their personal development and future financial stability. Therefore, introducing savings through a bank account is a practical step toward kids' financial education. According to the research, children with just over $1 saved for school are three times more likely to enroll in college, and those with $1 to $499 are 2.6 times more likely to graduate than those without any savings account. Moreover, kids saving accounts are a practical approach to teaching them about saving, interest accumulation, and online banking tools. Want to know the steps to open a kid's bank account? In this guide, we have shared the five easy steps to open a kids' bank account.

1. Choose the Right Account Type

There are typically two main accounts for a minor's bank account: savings and checking.

A checking account is like a wallet for your child's money at the bank. It's suitable for older kids who want to handle their money independently. With a checking account, they can use a debit card or checks to make purchases or pay for activities. Parents can monitor their spending and help them learn how to budget and manage money wisely.

A savings account is like a piggy bank in the bank. It's perfect for younger kids who are learning to save money. Savings accounts usually earn interest, so the money grows over time. Kids can deposit money and watch it grow, learning about the value of saving for the future. It's an excellent way to teach them about setting aside money for emergencies or big goals.

Both account types have their benefits, so it's essential to consider your child's age and financial needs when choosing the right one.

2. Research Different Banks

After deciding on the type of account that best suits your child's needs, the next critical step is thoroughly researching various traditional banks, credit unions, and online-only banks. Here are the factors you should consider when choosing the right bank or credit union for opening a kid's account.

• Look for accounts with minimal monthly maintenance fees to avoid unnecessary charges.
• Understand the minimum deposit needed to open the account and ensure it aligns with your child's financial situation.
• Consider accounts with extra features such as financial tools, educational resources, goal trackers, and parental controls.
• Compare annual percentage yield rates to maximize your child's savings growth through interest earnings.
• Make sure the bank has a vast ATM network or fee-free ATM access for convenient cash withdrawals.
• Opt for a bank with reliable customer support to promptly address concerns or issues.
• Check if the account offers overdraft protection and associated fees to prevent accidental overdrafts.

Best Banks for Children's Savings Account

Best Banks for Kids Checking Account

3. Apply for the Account

Depending on the chosen financial institution, you can apply for the account online, in person at a branch, or over the phone. But you need to provide some requirements for account opening.

Requirements for kids' bank accounts:

You and your minor will need valid IDs and other documents to open a kid's bank account. These are:

1. For the guardian or parent

• State ID
• Driver's License
• Passport
• Additional government-issued ID (if available)

1. For the minor

• Birth certificate
• Social Security card

1. Other documents

• Proof of Address
• Utility bill (e.g., electricity, water, gas)
• Financial statement (e.g., bank statement, credit card statement)

4. Fund the Account

To fund a kid's bank account for opening:

• Deposit cash or check into the account at the bank branch.
• Transfer money electronically from another bank account.
• Set up direct deposit for allowances or other income.
• Use a parent's debit or credit card to add funds online or through the bank's app.
• Some banks may also accept mobile check deposits.

5. Activate the Card

After opening the account, you must activate the card by calling a secure number or using the bank's website. Its a debit card for a checking account or an ATM card for a savings account. To activate your kid's bank card, simply call the bank or log in online with the card details ready. Choose a secret PIN and sign up for online banking to monitor spending and savings. The card has daily limits on expenditures and withdrawals, so discuss these with your kid.

Use this to talk about smart money habits, like saving and being careful with their PIN. If the card ever gets lost, report it to the bank immediately to protect the account.

Conclusion

Opening a child's first bank account is a great step toward teaching them about money management and saving. A savings account is best for younger children, but a checking account would be excellent if you want to open a bank account for your teenager. To open a kids bank account, research banks, apply for the account, fund it, and activate the card.

Moreover, encourage your kids to save regularly, spend wisely, and always be mindful of their financial choices. They'll be on their way to a financially secure future with these skills.