Typically, Maki said, banks provide student checking accounts for minors age 16 or older, as long as an adult parent or guardian signs as a co-owner of the account. Once the child turns 18 years old, most banks automatically convert the student account into a standard checking account.
Melissa Maki, vice president and marketing communications director at Middlefield Bank in Middlefield, and Jacki Pellettiere, assistant branch manager at Peoples Bank in Beachwood, said it is a good idea for teenagers to learn about financial literacy while they are young.
The right age for a bank account is mostly up to the parent and typically starts off with a savings account,” Maki said. “With even small monthly payments, you still earn interest on the balance, which can help those regular deposits grow into a significant asset by the time your child is ready to access the account. Taking your child to the bank to make deposits for a birthday, holiday, or other monies will also teach them about savings.”
Maki added parents should teach children about the differences between wants and needs, and the importance of saving money. There are several resources available, including the classic Berenstain Bears’ “Dollars and Sense” story. She said that story is a perfect way to teach young children about money and responsibility. Also, the Federal Deposit Insurance Corporation has online resources called “Money Smart” with lessons in age groups.
“Everything is based on having really good credit and being really responsible with money,” Pellettiere said. “So, that’s what I usually talk to them about. And then I will ask them questions about how they like to do their banking and how much they know about banking. When someone opens an account, there’s a pretty broad scale. Sometimes they’ve had a lot of exposure through school, maybe they’re taking a class on it, maybe their parents have talked about it with them. Other times, they know very little and I am actually showing them how to write a check.”
Pellettiere said when someone comes in to open an account, she tells them the importance of starting at an early age, and the more seriously you take money, the better position they’ll be in as you grow up.
She added it’s important to open an account at a young age so that you can build credit. She said people will sometimes come in to get a loan, and they may not even have a credit score.
“A credit score is based upon your history,” Pellettiere said. “When you open your checking account you get maybe a small credit card or a secured credit card. Those are all ways to build your credit and again help you later in life when you’re looking to get a loan for school, a house or a car. Everything is based upon your credit score, and it follows you. So if you start responsibly at a young age, then you’ll be in an excellent position as you grow into adulthood.”
Maki said teaching children how to manage money is critical to ensuring their future economic success. Personal banking has become more convenient than ever, she said, making it possible for parents to open accounts for their children to monitor their activity and teach them to sound financial habits whenever they feel ready. “Think about opening a checking account for your child as soon as you feel he or she is capable of learning how to use one,” Maki said. “All students learn at their own pace, and the only age limit you need to worry about is the requirement set by the bank you choose.”
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