Time to open a teen checking account?

Did your teenager land their first job? Then it’s a good time to start talking about opening a teen checking account.

A teen checking account — also referred to as a student checking account — is a joint account, with you and your teenager as co-owners. Your teenager is the primary account holder on the account. Both you and your child can make deposits, withdrawals, and access online banking for the teen checking account.

Your teenager is making money now. You probably got by with a savings account in their name from the time they were born. But now that your teen has a job, they’ll have regular paychecks that need a place to deposit and maybe even some bills to pay. That’s where the teen checking account comes into play.

Teen checking accounts are also useful to give your teen a taste of independence. Having one’s own bank account can feel empowering, as it’s one of a person’s first steps into adulthood.

There are the functional and emotional benefits of a student checking account, and then there are the educational benefits.

This checking account is their first taste of money management. Sure, they may have earned an allowance years ago or received checks on their birthday, but a weekly or bi-weekly paycheck is a whole new ballgame. With their own teen bank account, they can check their account balance, set up direct deposit, make ATM withdrawals, use a debit card, learn how to budget, send friends and family money, and make transfers between checking and savings accounts. These are critical financial skills to pick up before they turn 18 and become an adult.

1. Checking Account Balances
   A teen checking account would get your teen accustomed to staying on top of their account balances. They could do that every day through their bank's mobile app*.
2. Setting Up Direct Deposit
   It might seem trivial, but setting up direct deposit is a financial skill. Your teen will need to be comfortable doing that by the time they get their adult job.
3. Making ATM Withdrawals
   A checking account means your teen will learn how to use an ATM. Again, this may seem trivial, but not to someone who's never had their own bank account.
4. Using a Debit Card
   Not only will your teen learn how to use their debit card and PIN, but they'll also learn how to keep track of both.
5. Budgeting
   A teen checking account is a great way for your child to learn how to budget, especially when they're in between paychecks and need to avoid overdrafting before their next pay day.
6. Transferring Money Between Accounts
   This will help your teen develop a habit of saving, which will serve them well for years to come.

And let’s not forget learning the perils of overdrafting. Let’s say your teenage son has $100 in his student checking account. He’s wanted to buy this new video game for a long time, and he sees it online for $60. Perfect — he should have enough money to cover it, right? He goes ahead and buys the video game, only to get an alert that he overdrew on his account.

How could this be? What your son didn’t realize was the $50 he spent the day before at a restaurant hadn’t been processed yet. Therefore, he didn’t have $100 in his account like he thought he did; his account balance was only $50.

These lessons, and many more, can only be learned by having one’s own checking account.  

Further, while teens can use their student checking account to pay for gas and other recurring expenses, you can monitor their spending as a co-owner on the account. The idea is for your teen to learn about money management with you as their security blanket. Then, once they get the hang of it, they’ll be much more empowered when they graduate high school and either go on to college, the workforce, or the military.

Everyone needs to learn about money management at some point. Your child might as well get a head start on these lessons.

Perhaps, depending where you open the teen checking account. For example, you could set up protections on the student checking account so that anytime an overdraft occurs, money is transferred from their savings account to keep the checking account from dropping below $0. Then, you could talk to your teen about it so they’re cognizant of their balance before making purchases.

You could also prevent overdrafts by setting up low balance alerts for your teen. That way, they pay more attention to their balance until their next pay day.

Your child is eligible to open a Citizens Student Checking account when they turn 14 years old, but age requirements vary from bank to bank.

Some banks have monthly fees for student checking accounts and may require a minimum balance to open the account. Some fees are fixed for easy budgeting, while other fees could be waived with certain account usage or by maintaining a specific balance.

Is your teen ready to take on a little more responsibility? When your child turns 14, look into opening a Citizens Student Checking account. There’s no minimum balance to open and no monthly maintenance fee for individuals under 25 years old. Or, if you have questions about any of our other banking products, feel free to visit a local branch. We’re always happy to help.