Can you open a checking account for your child?
Can you open a checking account for your child?
Kasasa Blog

Find tips to improve your financial well-being

Opening a checking account for your kids is easy, and it's also a good idea for your child's financial education and future. With a checking or savings account, your child will learn how to manage their money. They'll also have an easier time learning how to manage their account balances and make deposits or withdrawals using an ATM or mobile device.


Even if they run into any trouble with their checking account, you can always step in to help. With a checking account, you can start teaching them how to manage their money and make smart decisions. Imagine if you had set money aside using a youth checking account from an early age. You could have a nice nest egg by adulthood, so it's essential to start a checking account for your kids as soon as possible.


Here's what you need to know to get started.

What you need to open a checking account for your child


Minors won't be allowed to open a checking account in their name. An 8-year-old kid can't just walk down to the bank or credit union and get their own savings account without the help of their parents. Instead, you'll need to open the account in your name as an adult and then add your child as an authorized user on the account. This will allow your child to access the account and make transactions, use a debit card linked to the account, or even create a digital wallet on a mobile device.


You'll need to bring documentation containing your personal information to the bank to prove your identity and that of your child. If you're unsure what documents the bank will need to verify your identity, it's best to either review your financial institution’s website or call ahead and ask. You'll need to provide your child's proof of identity with their social security card, driver's license, or passport. Once the account is open, you'll be able to choose a debit card and link it to your account. The card will either be issued to you in the bank or mailed out to your residence. This is how your child will access their funds.


The checking account will belong to the child, but you'll be their cosigner. That means you're responsible for any overdraft fee or other issues that occur. You can set up a mobile banking account so that you and your child can view the account’s balance through the bank's online banking portal to help both of you stay on top of things. That'll allow you to monitor the child's spending, make sure they're keeping a safe minimum balance. You can also set up text alerts to inform you when they use their card or withdraw money from an ATM.

Things to consider before opening a checking account for your child


As the checking account's custodian and cosigner, you'll be responsible for any overdrafts that occur on the account, as well as any charges made by your child using the debit card.


This means you'll need to monitor your child's spending habits closely and ensure they don't spend more than they have in their account. Be wary of identity theft and data breaches: Your kid might not know the best practices for financial security and could inadvertently expose your data. Take steps in advance to mitigate this, such as:


  • Setting up a credit monitoring service that will alert you if there's been any suspicious activity with your child's account.

  • Putting an alert on your child's credit report to make sure no one else is trying to open an account in their name.

  • Setting up two-factor authentication for all of your accounts, including those for your kids.

Identity protection is an important part of teaching financial literacy to your kids. You can help them understand the importance of being vigilant about their data and identity and what steps they can take to protect it.


You'll also need to teach your kids about different bank fees, especially surcharges for using an ATM that's not part of your bank's network. If you're not careful, this can add up quickly.


It's also important for you to know the rules about overdrafts and how they'll affect your child in case of an emergency. Some banks charge fees for each overdraft; others allow a certain number per year before charging a fee. You'll need to know these policies in advance to help protect your child from being charged extra.


The benefits of opening a checking account for your child

When you open a checking account for your child, you're teaching them about the importance of saving money, how to budget and pay bills on time, and how to use credit responsibly. You'll also be able to teach them about the importance of saving for emergencies and unexpected events that might come up in life. This will help them learn good money habits that will last throughout their lives.


You can start slow and gradually increase their levels of financial responsibility with time. For instance, you could begin with a savings account when they're young and then move them to a checking account when they're old enough. As they get older still, they can learn about debit card spending and personal finance. Ultimately, you can teach them about credit cards and how to build a good credit rating.


But all of that begins with a bank account. When they're young, having their own checking account can help them learn about money management from an early age. They will be able to learn about budgeting, saving for the future, and banking etiquette, such as keeping track of their balance and making sure it doesn't dip too low to avoid overdraft fees. This can help them develop good financial habits that will last them throughout life.

How can you monitor a child's checking account


As a custodian, be aware that your child’s checking account is your responsibility as much as theirs. In fact, legally speaking, it’s entirely yours. Whatever happens with the account will be on you, the parent. This means that if your child overdraws their checking account or makes a mistake on their checkbook, it will reflect in the bank's records and potentially even on your credit report. If your child has their identity stolen, it will directly affect you as well.


To help prevent this from happening, you'll need to set up a monitoring system for the account. If you're worried about the account being overdrawn, you can set up automatic alerts to be sent to you as soon as any charges come in. You can also set up a low balance alert so that if there's ever a time when your child's account is getting dangerously low on funds, you'll know right away.


You can also use the checking account as a basis for ongoing financial education with your child. For instance, you could check in with your child once every few weeks to see how they're doing financially or have them send you copies of their monthly statements so that you can review them together. You might consider discussing the various forms of identity protection monitoring available to you and how to keep data safe in a connected world.


Almost all banks today have online portals where you can view your child's account. You may also be able to set up alerts that notify you when certain events take place, such as when a withdrawal is made or if there are insufficient funds in the account. That way, you'll be able to catch any mistakes or bad behavior before it does any damage.


Monitoring together

With online banking, you can monitor your kid's checking account from anywhere with an internet connection. This makes it easy to check in on their spending habits and avoid dangers like ID theft, which can be especially important if they're old enough to have a prepaid debit card that allows them to make purchases online, such as through a mobile app or tap-to-pay technology.


If you prefer to give your kids more autonomy, you can give them an allowance and let them manage their own accounts. This requires more trust on your part, but it's also a great way to teach kids how to handle money responsibly. With a system of alerts in place, you'll still be able to monitor that teen checking account without constantly watching them. This is an important part of ensuring they have a strong financial education.


Set reasonable expectations, follow through on the consequences if they're not met, and encourage them to take accountability for their own finances. Teaching them to use checking accounts like this can potentially benefit them for the rest of their life.


Opening a checking account for your child is a step toward financial independence


The best thing about opening a bank account for your children is that it allows them to learn about money management. It gives them an opportunity to:


  • Learn about the importance of saving money

  • Learn how to use a custodial account, set their own goals, prioritize their needs and wants, and plan accordingly

  • Understand how debit card and money movement occurs

  • Get a head start on learning to manage future investment accounts, such as a retirement account or Roth IRA they might use

These are important life skills that can give your child a massive head start when they enter adulthood.

Financial Literacy: The sooner the better


Did you know that you can open a checking or savings account at a bank or credit union for your kids just as soon as they're born? You can start a custodial account for them, which is basically an account in the child's name with the parent acting as its custodian. The parent has legal responsibility for the money, but the child can use it and get full ownership when they become adults. There's no actual age limit involved.


A kid's parent or guardian will be acting as a joint account holder, which means their name will be the one used for major transactions. This will be a joint bank account to which both you and your child can access. You can start teaching them about custodial accounts early on by showing them their balance and letting them decide what they want to spend it on. You can also use this account as a place to deposit birthday money or other gifts that people give to your child, which can act as a springboard for more education opportunities, teaching them how to:


  • Make purchases online or at a store with a debit card or credit card (with some type of parental approval)

  • Deposit money into savings accounts

  • Pay bills online or via a phone app if they're old enough (and responsible enough)

You can make this even more effective by setting up an automatic transfer from your own checking account to the child's. This will allow you to set aside money for them without having to think about it and make things easy for them when they get older.


As their parent or guardian, you'll also have the option of getting them a debit card, which can be a great way to teach them about spending responsibly. Be sure to discuss with your children what is expected of them and why you're setting up this checking account for them. Let them know that having their own checking account means that they have more responsibility and that you'll be monitoring their account activity.


The checking account's debit card would be under your control, so you can decide whether your child can use it. Having a debit card entails a fair amount of responsibility, however — not all kids are ready for it. But if you do get them one, make sure to have a discussion with your child about how to use it the right way. And you can always set a spending limit on the card that they can't go over, as well as control how much money they have available at any given time.

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