When to Open a Bank Account for a Child

It's never too early to start teaching your kids about money. You might teach them the correlation between hard work and money by giving them an allowance for completing chores, or you could use a piggy bank to convey the importance of saving for larger goals. However, do you know when to open a bank account for a child? Young children typically aren't responsible enough to handle their own bank accounts, but you might wish to open an account in their name for practical and educational purposes.

When is the right time? 

If you're wondering when to open a bank account for a child, remember that most savings accounts for children give the child's parents joint ownership. So until your child is ready to manage the account on their own, you can retain responsibility. In addition, your child likely won't be required to meet a specific age limit, because you will have control of the account.

Generally, very young children don't have enough money to make a bank account worthwhile. However, once they begin accumulating savings (perhaps through birthday or holiday gifts), you might consider opening an account in their name. Sometimes this will happen when the child is an infant, and other times it will occur when the child is in school. A savings account will give your child's money the opportunity to grow and give you the opportunity to teach your child how bank accounts work.

Work with your credit union to select a savings account that suits your child's (likely quite simple) needs. You might wish to keep an eye out for the following factors:

• No minimum balance. Your child may not have a lot of funds in their account or they may spend a large chunk at once, and you won't want to worry about minimum balances.
• No monthly fees. Monthly fees aren't typically necessary for simple accounts. Plus, at this stage, your child should see their bank account as something that helps money accumulate, not something that costs money.
• A good interest rate. Showing your child how interest works will be worthwhile, so find an account with a good, solid interest rate. Typically, credit unions offer better rates than national banks.
• Online and in-person access. Having multiple options for accessing the account isn't just convenient; it will also help you teach your child how banking transactions work.

When you're ready to open a savings account for your child, simply visit a branch of the credit union. Bring your child's social security card, your own identification (social security card, driver's license), and an initial deposit.

Are you ready to introduce your child to the world of finance? To learn more about the credit union's services and benefits, please stop by one of our branches or explore our website.