There are many reasons to open a bank account, especially as an adult. In short, many would ask you why an adult doesn’t have one. That same feeling is climbing down towards teens.
With each passing day, the need for kids to have bank accounts continues to increase, with reasons why they should.
While choosing any bank account for your children, it is best not to guess but to get them the best bank accounts for teens that are available now and secure.
This article discusses the best bank accounts for teens and how they operate.
- What are bank accounts?
- Why has interest been important for centuries?
- How important is high interest?
- Do teens need bank accounts?
- Best bank accounts for teens with high interest
- #1 – Capital One money teen checking account
- #2 – Citibank junior account
- #3 – Wells Fargo’s teen account
- #4 – Union bank’s teen access account
- #5 – Citizen’s Bank student account
- #6 – PNC kids bank account
- #7 – US bank student account
- #8 – BBVA checking accounts for teens
- #9 – Bank Of America’s child savings accounts
- #10 – Chase high school checking account
What are bank accounts?
Bank accounts are arrangements between people and financial institutions. This arrangement allows them to keep money at the bank or collect money from it.
There are many types of bank accounts arrangements that banks have with their customers. There are checking accounts, savings accounts, joint accounts, current accounts, etc.
Some use bank accounts to hide their money.
Why has interest been important for centuries?
Investopedia explains this with “Interest rates go a long way in determining the geometry of the economy, meaning the actual distribution of labor and resources.
It matters which industries grow and which industries shrink, and where people are deploying financial and physical capital. Interest rates guide much of that movement. Interest serves several crucial functions in a market economy.
The most obvious is the coordination between savers and borrowers. Savers are paid interest for putting off their consumption until a future date, while borrowers must pay interest to consume more in the present.”
How important is high interest?
Interest rates affect everyone too much to bother everyone. People need high-interest rates because it covers most often any economic inflation that may befall the country.
One appeal of high-yield savings accounts is that savers wouldn’t lose ground to inflation on their emergency savings.
Do teens need bank accounts?
A bank account for teens may give them something to brag about to their friends but also gives you some peace of mind because they’re learning a very valuable life lesson which is financial responsibility and how to manage money.
Uncertainty from teenage age is what makes many youths shy away from finances and getting themselves in order.
Statistics claim that only 58% of soon-to-be-college-graduates said they had a credit card, according to a recent Experian College Graduate Survey.
Best bank accounts for teens with high interest
#1 – Capital One money teen checking account
Capital One has a plan for teens called money teen checking. The teen checking account is not only for teens but for kids, tweens, and teens, so long as they are above 8 years old.
Parents also are allowed to check up on the account and stay on top of their child’s spending and take advantage of teachable money moments.
This account that was named the GOBanking rates best-checking account of 2021 comes with a free debit card with which teens can use to access their money at the over 40,000 ATMs across the United States.
The Capital One Money Teen checking account charges no fees and has no minimums. The Interest Rate on the teen account is 0.1000% with an Annual Percentage Yield of 0.10%.
The interest rates and annual percentage yields are variable and may change at any time at the bank’s discretion. Interest on the teen account is compounded and credited on a monthly basis.
Capital One’s policy for the teen account states that “for all types of non-cash deposits, interest will begin to accrue no later than the next business day following the banking day on which the funds were deposited.
For cash deposits, interest will begin to accrue the same day on which the funds were deposited.
#2 – Citibank junior account
Citibank has a plan for teens above 15 years of age. This is expected to give a firsthand experience in banking. This account comes with a credit card to reduce giving pocket in cash.
This credit card can be used to establish a healthy teaching experience in financial education for teens early on and help them create a good credit history early as the teen grows.
Financial experts believe that “a credit card can be a great tool for teaching kids about money, mostly because teaching your child how to responsibly use a credit card often leads to all kinds of money conversations about budgeting, avoiding debt, and planning for big goals.”
#3 – Wells Fargo’s teen account
The Teen Checking account at Wells Fargo & Company (WFC) requires a $25 initial deposit and comes with no maintenance fees.
For parents, notifications on transactions can be sent via text or email, and limits can be set on debit card spending and account withdrawals.
Teens can benefit from the money management tools available through the account. The bank offers mobile access for routine banking and fraud monitoring.
#4 – Union bank’s teen access account
Union Bank also offers a Teen Access checking account for teens ages 13 to 17. This account, which requires an adult joint owner, helps teens learn about financial responsibility.
When your teen turns 18, his or her Teen Access account automatically converts to a Banking By Design checking account.
Pending on when the teen’s account becomes banking by design account, the teen account’s minimum is $1 and a monthly service charge of $0.
This teen account comes with an ATM card with a $100 daily withdrawal limit and day or night online account monitoring, and interest is compounded daily and paid quarterly.
This teen account requires an adult joint account owner.
#5 – Citizen’s Bank student account
Opening a student account at Citizen’s Bank, which is a subsidiary of Citizen’s Financial (CFG), comes with no monthly fees until the age of 25.
It also provides an account experience similar to joint checking accounts with online access and mobile banking.
The advantage for teens is that, when a savings account is linked to the checking account, the bank provides extra tools to help set goals and track savings for the purchase of a car, travel, or college.
The Monthly Maintenance Fee on this account will be waived if at least 1 deposit is posted to your account before the end of your statement period.
To find your next statement period, refer to your most recent statement. Interest on this account $3 per month not assessed when an account signer is under 18 or 65 or older based on the date of birth on file.
#6 – PNC kids bank account
The PNC kids’ bank account is one that offers sincere benefits to children and teens alike.
The bank requires that anyone who needs to be registered for a children’s account must be under 18 years of age, and will not be charged a monthly service charge if the owner maintains a $300 average monthly balance in the account.
The account comes with an interactive online banking experience, unlimited deposits, and an interest rate starting at $1.00.
#7 – US bank student account
The Minneapolis-based bank has more than 3,000 branches in the West and Midwest in addition to Florida, North Carolina, and Tennessee. Customers can also visit more than 5,300 ATMs within the MoneyPass network.
The big bank has something for everyone: prepaid cards and credit cards, loans, and refinancing options, as well as investing and wealth management tools.
The bank offers student account checking benefits to teens below the age of 18.
This account allows the teen to access money through ATMs that are almost everywhere; one that they are not charged for until after their first four non-US Bank ATM transactions.
US bank allows accounts to be created through an online application process.
#8 – BBVA checking accounts for teens
The BBVA has this to say about teens opening an account with them. They believe that “When your teen is learning about money management and banking, a checking account is a great first step.
A checking account can help teach teens, with a parent’s guidance, how bank accounts work, how to use online banking tools, and how to write a check.
It can also help parents start discussions with their teens about the importance of creating budgets, managing spending, and saving money.”
BBVA teens checking account offers a minimum opening deposit of $25.
#9 – Bank Of America’s child savings accounts
This child savings account by Bank of America is one for teens and children below 18. It is an account is owned by the minor and the parent but the minor still access to funds before 18 years of age.
The account has a minimum opening deposit of $25 and is insured by the FDIC to the maximum amount allowed by law.
BOA child savings account converts to a Bank of America advantage savings account when the minor turns 18. This account has an interest rate of 0.05 %.
#10 – Chase high school checking account
Chase high school’s checking account is for students that are between 13 to 17 years old at account opening with their parent/guardian as a co-owner and the account must be linked to the parent/guardian’s personal checking account.
The account is set up in a way that it helps parents teach their teens and kids about money by giving parents the control they want and kids the freedom they need to learn.
“Chase” is registered under the JPMorgan Chase Bank, which is a wholly-owned subsidiary of JPMorgan Chase & Co.
This article does not discuss all the banks, as that would be really unreasonable, but within it are the best ten that are recognized internationally.
The best bank account for teens could also be the one you use or the one around you.
After reading this article, you should be able to make informed decisions regarding the best bank accounts for teens.