Opening a checking account for your child: When’s the right time?

An important part of parenting is helping children reach developmental milestones – and money management is a major one. Teaching money management skills to children at an early age can help them become financially adept adults. Implementing age-appropriate financial buffers and gradually weaning off parental support as the child learns new concepts can be effective strategies that promote financial mastery.

Opening a checking account for your child: Are they ready?

The best age for a child to open a checking account varies from child to child. However, the Consumer Financial Protection Board lists skills that can indicate readiness to take on more money-related responsibilities divided by age group.

For example, milestones for children ranging from school-age to the preteen years include developing financial self-control and the ability to work toward a goal. For teens, learning how to read a bank statement and make sense of its different information will support money management success.

Although federal policy sets 18 as the minimum age to own a bank account, rules vary by state and financial institution, making it potentially confusing to know at which age a child is truly eligible. If in doubt, visit your local branch where a banker can walk you through the bank's age limit.

Getting started

Starting off with only a savings account can be advantageous, according to the Federal Deposit Insurance Corporation’s Money Smart program. This can empower children to learn money basics before moving onto more complex account types, like checking accounts.

Typically, savings accounts may be opened for a child of any age, although usually the parent must be a custodian or joint holder of the account. After a child masters the account deposit process and understands how earning interest works, it may be time to consider opening a checking account for them.

Before you proceed, though, consider whether your child is mature enough to understand how a checking account works, as well as if they can successfully navigate its associated risks, such as overdrafts and other additional fees. Keep in mind, too, that even the most responsible child is likely to make mistakes – and that’s okay – it’s part of why it makes sense to start cultivating financial independence early when the stakes are low and parental support is close at hand. It’s also why some banks offer features that serve as guardrails to help facilitate the learning journey while limiting the downsides.

As you move forward, a good first step is to identify any age restrictions surrounding opening a checking account for your child. Even if state laws are permissive, banks can still impose their own standards. Many institutions set the minimum age to open a checking account at 13 years old and often require an adult to be named on the account as a custodian or co-owner.

The real-life, hands-on experience of managing a bank account and its related duties can instill confidence and competence in young account holders. The biggest reward, however, may be the budding healthy money habits that could serve them throughout their lives.

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