Best Bank Account for Teens

Best Bank Account for Teens: What is the Best Bank for Under 18

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Last updated on December 10, 2020

Setting up a bank account for your teenager is a great way to start teaching them good financial habits they can take into adulthood.

Teen banking can help them develop solid saving and spending habits and familiarize them with everything involved with banking. Teenagers under 18 will need their parent’s help when opening a bank account and you’ll likely need to be a joint owner. This means you can access your teenager’s account and monitor the transactions they’re making.

Best Bank Account for Teens

1. Axos: Best for learning to manage money

Designed specifically for teens aged 13-17, Axos Bank First Checking is the perfect first bank account for your child. With no monthly fees and a 0.25% APY, teens won’t get penalized for making mistakes while learning how to manage their money. There’s a $50 setup fee but, after that, teens can start making transactions and monitoring their spending and saving habits. The only downside is account holders can’t deposit cash or write checks, but everything else is made easy with Axos.

2. FamZoo: Best for prepaid cards

FamZoo is more of a family finance app where you can closely monitor the transactions your teens are making. You can easily add their pocket money to a prepaid card so you know exactly what they’re spending, and there’s no room for any mistakes. As a joint account holder, you can create saving incentives for your child and help them develop good financial habits through regular practice.

3. Current: Best for monitoring spending

Current lets you give your teen an element of financial freedom. But you can still closely monitor their debit card spending through the app and take control of their finances when you need to. Parents have full visibility into their child’s spending habits and can block purchases from certain merchants, get instant notifications, and set spending limits. You can even set chores through the app and automate allowance payments once they’ve been completed.

4. Capital One: Best for transferring money

Give yourself peace of mind with a Capital One Teen Checking account that lets you gain full visibility over your teen’s finances. The best bank for teens charges no fees at all, making it easy to teach your child how to manage their money, while the mobile app makes it a breeze to transfer money to your teen, whether it’s their babysitting fee, a birthday gift, or their weekly allowance.

5. Wells Fargo: Best for independent teens

While Wells Fargo’s Clear Access Banking isn’t specifically for teenagers, it has a lot of features in place that are useful for teaching them good money habits. The monthly service fee is waived for 13-24-year-olds, and the suite of features includes budgeting, cash flow, and spending tools. There are no overdraft or non-sufficient fund fees if your child goes into the red, and parents can have complete access to transaction history.

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Finding the Right Bank Account for Your Teenager

The best bank account for teens will depend on their spending habits, how familiar they are with managing their finances, and their age. However, there are some features you should look out for if you want to use your teenager’s first bank account as a chance to teach them good money habits.

Most accounts geared towards teens are free to set up and they often require a parent to be a co-owner. This means you can have full visibility over your child’s transactions as well as block certain merchants in some cases.

If you’re planning on transferring money directly into your teen’s account for their allowance, you’ll need an account that automates free transfers – many banks will offer this as standard, especially if you already have a standard bank account with them. Otherwise, it’s a case of looking for what suits your needs best. Maybe you want access to cash flow and budgeting tools to teach your teen how to manage their money, or maybe you want a prepaid card rather than a debit card so you can control how much your child is spending.

Mobile Banking

Mobile banking for teens is a great way to get them familiar with managing their money on a daily basis. A mobile app they can log in to every day gives them the autonomy they need to understand their spending habits and save more money.

Most bank accounts today come equipped with a mobile app which makes it easy for both you and your teen to access the account from your phone. Mobile banking for teens will help them track spending on-the-go, while you closely monitor every transaction.

Monthly Minimums and Fees

The majority of banking apps for teens come with no fees.

This means your teen won’t get charged for dipping into their overdraft, overspending, making transactions, or withdrawing money. Unlike some regular bank accounts, they don’t usually have a monthly fee, which makes it a cost-effective way to teach your child money management skills.

For hands-on banking, teens should consider accounts that either don’t have a monthly minimum or have a very low monthly minimum. It’s unlikely your child will be earning a lot of money, and the bank fees should reflect this. The best savings accounts for teens also won’t have any fees, making it easy for your teen to save money.

The teen banking accounts listed above don’t have any fees so you can teach your teen about financial freedom without having to worry about excess costs.

Parental Controls

Online banking for teens is different from regular banking because accounts come equipped with a range of parental controls. This means you can keep a close eye on your child’s spending and monitor their money habits.

Banking apps for teens come with dedicated parental controls, like limiting transactions, adding in a spending limit, blocking purchases from certain merchants, and making transfers only when tasks have been completed.

Knowing what your teen is spending will help you have an open discussion about their finances and encourage them to develop good habits early on.

Future Options

Preparing your teen for adulthood is one of the best things you can do as a parent, and finances are such a huge part of adulthood.

As they start to utilize hands-on banking, teens will get a better sense of what they can and can’t do. This means you can loosen your control over their account and start giving them the freedom they need while still making sure they’re making good choices.

The best savings accounts for teens will enable them to practice money management and start saving their allowance and earnings.

The best bank for teens is one that provides both a card and an app so they can closely watch their spending (and so you can too).

It’s wise to choose the best checking accounts for teens that also have regular accounts they can upgrade to when they turn 18. This gives them the choice to continue using an account they’re familiar with so they can continue their financial journey.

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Conclusion

The best bank account for teens will allow you to closely monitor their account and will help them navigate their way through transactions, transfers, spending, and saving, all while safe in the knowledge that they can’t make any major money mistakes.

Online banking for teens is a great way to introduce your child to managing their finances, while the best checking accounts for teens are ones that give them some semblance of independence while they learn about the world of finances.

Keep an eye out for the key features on offer too, as services like limiting transactions, spending overviews, and budgeting tools are all crucial elements of showing your teen banking, and how to make good money decisions now and in the future.

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