4 considerations for opening your child’s first checking account

Children grow up fast. One day you’re buckling them into a car seat, and the next you’re handing them the keys. Like learning to drive or taking on a first job, managing a checking account is a big milestone that teaches responsibility and will help your child learn important financial habits.

Parents often ask about how to open a bank account for kids. Many checking accounts, including Discover^® Cashback Debit, are for adults aged 18 and up, so you can help your child set up their own account when they are heading off to college or starting their career. If you’re interested in opening your child’s first checking account when they are younger, you could consider opening a joint checking account that you share with your youngster. Note that for some checking accounts, like Discover Cashback Debit, you must be at least 18 years old to be added to the account as a joint accountholder.

“Is your teen interested in managing money, saving for different goals and spending on their own?” asks Kimberly Palmer, a personal finance expert. If so, a checking account can be a great way to flex those skills and practice money management, she adds.

If you’re considering opening your child’s first checking account—whether it’s a joint account you help manage or a solo account for your older teen—consider the following four tips:

1. Factor in fees

Whether you’re going to open a child’s bank account online or in a brick-and-mortar bank, it’s important to understand the fees associated with the account and who is responsible for paying them, says Mia Taylor, an award-winning financial journalist. Your child may think you are covering the fees if you have a joint account, for example, so be clear on the parameters when you open the checking account.

If you’re wondering how to open a bank account for kids going to college or starting their first job, “look for an account with no minimum balance fees or monthly balance fees,” Palmer says. That way, your child won’t have to worry about being penalized for having a low balance or stress about fees eating into earnings and spending money.

If you’re setting up a checking account for a kid heading off to college or moving to a new city, you’ll also want to consider the fees associated with withdrawing cash from out-of-network ATMs. You can use a bank’s ATM locator to ensure there are no-fee ATMs near their college campus or apartment.

2. Focus on features

Choosing the right checking account for your child’s lifestyle may mean finding an account that has features that support their needs and goals, as well as your preferences.

If you are opening your child’s first checking account and they are younger and sharing the account with you, you may want the ability to set limits on spending and the number of withdrawals. “Parents and teens may have different preferences for each of these features, so it’s important to talk about what you’re looking for ahead of time and compare the different options together,” Palmer says.

If you have a joint account with your child, you could also consider setting up email or text alerts for every transaction or every large transaction over a certain dollar amount. This may help you keep better track of your child’s spending habits and could help you have conversations about how to create a budget. Setting up a low balance notification may also be wise when you open a child’s bank account online to help avoid overdraft and insufficient funds fees.

Again, before asking how to open a bank account for kids, you want to consider your options when it comes to checking account features. While you’re at it, don’t forget the benefits of a rewards checking account. Discover Cashback Debit, for example, offers 1% cash back on up to $3,000 in debit card purchases each month.¹ If your child is 18 or older, you can let them decide how the cashback should fit into their budget and financial goals.

3. Make mobile a priority

It’s no shock that today’s kids are experts at navigating a smartphone. As you make plans to open a child’s bank account online, be sure to consider whether the checking account has a mobile app for making deposits and tracking funds, Taylor says.

“Mobile deposits are a huge convenience factor for teens” since it allows them to deposit funds with the snap of a photo, Taylor says. Be sure to also research the app’s functionality (the easier, the better) and security, Palmer adds.

Tracking spending with a pen and paper may feel tedious to digital natives, so talk with your child about how they can sync their checking account with other budgeting and spending apps. Exchanging money with friends via digital wallet apps may also be of interest to your child, but you may want to consider providing guidelines when opening your child’s first checking account.

“Only send money to people you know, not to strangers,” Palmer suggests.

Even though digital wallets can be convenient for older teens, Taylor says you may not want to overcomplicate a checking account for a younger child. “Keep it simple in the beginning,” she says. “As teens get older, they can add those features on their own.”

4. Use the account as a teaching tool

Good financial habits are learned early and remembered for decades. That’s why the most important thing parents can do when opening your child’s first checking account is to use the account to have discussions about money, Palmer says.

“Ask them what they want to save for, what kinds of items they hope to buy and what—if any—money they would like to donate to a cause that is important to them,” Palmer says. “A checking account is a useful way to plan for future expenses and savings goals—all lessons that carry into adulthood.”

A great way to pass on money management lessons is to show your children how you manage your own account.

“Sit them down and show them what you’re doing with your own checking account so that you can pass on good values early on,” Taylor says. “The earlier you start with kids, the wiser they will be.”

Want to boost your kids’ financial literacy? Learn how to make a household budget that gets the whole family invested. 

¹ Earn 1% cash back on up to $3,000 in debit card purchases each month. See Deposit Account Agreement for details on transaction eligibility, limitations, and terms.

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