As teenagers start making their own money and
paychecks get direct deposited, a checking account is a must but how do they
choose which checking account is right for them? There are many factors to consider
depending on teens’ lifestyle needs. A teen checking account may be the best
way to gradually introduce and give hands-on experience using a debit card,
reading bank statements, tracking expenses and creating a budget.
A teen checking account is essentially a checking
account with training wheels. I love this analogy because it provides a safe
and controlled environment for teenagers to learn how to manage their money
while mitigating the potential for costly mistakes as they learn.
As a parent of teen boys, I like that teenagers can
manage their money with parental guidance and I can monitor activity, set
limits and provide guidance with a teen checking account. It also gives me
peace of mind since it offers reduced risks and consequences like no overdraft
fees or the ability for a parent to lock the card if lost or stolen.
These accounts allow teenagers to gain practical
experience using financial tools and concepts all while having the support and
guidance of a parent to help navigate the learning process in a safe manner.
When shopping for a teen checking account, teenagers
and parents should carefully consider the benefits certain accounts offer such
as fees, parental controls, account features, online user-friendliness, and ATM
accessibility.
Some accounts that I researched were Alliant Teen
Checking, Axos Bank First Checking, Capital One MONEY Teen Checking Account,
Citizens Bank Student Checking, Chase High School Checking, and Connexus Credit
Union Teen Checking.
I found the Capital One MONEY Teen Checking Account to
be an excellent option since we prefer online banking. They don’t charge a
monthly service fee so more money stays theirs, there are no overdraft or out-of-network
ATM fees making it on par with some of the best ATM fees.
Another benefit to consider is that it’s not just for
teens. This particular checking account is available for kids eight years and
older, is FDIC insured with $0 liability for unauthorized transactions, can
send/receive money with Zelle, and can be linked to external accounts so
parents can connect any account to the MONEY teen checking account.
Another thought to keep in mind is how much money teenagers
need in their bank account. A good rule of thumb is to save 10 percent of what they
earn and have at least three months’ worth of living expenses saved up in case
of emergency. Once your teenager has a steady income, help them set up a
savings account so at least 10 percent of their earnings go directly into savings.
I have always considered myself financially savvy and
want to impart my money managing guidance to my teenagers. It has always been
important to my husband and I that we give our boys the tools and resources
they need to be successful adults; now they just need to utilize them.
