7/14/2020

What to Look for in the Best Checking Accounts for Teens 

Your child is growing up and soon will be responsible for managing more aspects of their life. As they enter the workforce, finances become an important aspect of their emergent adulthood. You can help them navigate these increasing responsibilities and more adult realities by finding the best checking account for teens.

These accounts maximize savings while minimizing risk as your teen learns financial responsibility. Teach them the benefits of saving, building credit, paying bills, and responsibly managing cash flow while safeguarding them from overspending. As your teen learns financial independence, ease their uncertainties by looking for these optimal features.

Minimal Fees

Often, there are fees associated with checking accounts. When you’re working with a limited income, such as a newly working teen, these fees can seem insurmountable. If you’re not careful, these fees add up—making it difficult to increase savings.

The best checking accounts for teens have no monthly fees or minimum balance requirements. This means you don’t need much money to get started. Plus, your limited income will not be stuck in your account, unable to be withdrawn so you can meet the minimum monthly balance. You’re free to save or spend it as necessary.

Another great feature to look for is overdraft protection. When your teen is just starting to learn how to budget, it’s easy to miscalculate available funds and spend money that isn’t in their checking account. They may have the necessary funds in their savings and simply need it transferred. However, many accounts charge overdraft fees for the transfer. If your teen does this several times, their money is quickly gone. Look for an account that automatically transfers money from their savings account without a fee. That way, their mistake won’t be costly.

Other costs to avoid are ATM and debit transaction fees. Some credit unions waive ATM fees or offer ATM fee refunds. This enables your teen to freely withdraw money without losing their limited income to unnecessary fees. Make sure the teen account includes a free debit card with zero liability fraud protection—protecting your teen from fraudulent charges.

Free Online and Mobile Banking

Your teen lives in a digital world. Though traditional brick-and-mortar banking is still a viable option, a lot of banking has moved online. This is especially convenient for a teen who spends much of their time on mobile devices.

For a teen who is busy with school and extracurricular activities, online and mobile banking makes it easy to maintain access and control of their money—no matter where they are. Make sure to select a checking account with zero fees for all of their online banking needs. Whether they need to deposit a check using their mobile device, make a transfer, pay a bill, or simply view their account, your teen should be able to access these tools without a cost. Online and mobile banking is a secure and easy way to practice account management.

Parental Control

While you want your teen to exercise their fledgling independence, that doesn’t mean you have to leave their spending unmonitored. The temptation to overspend is common even for adults so it’s essential to stay involved in their spending habits while they’re still learning.

Some credit unions allow you to set limitations on how many times your teen can make debit card transactions or withdrawals. Or enable you to limit the amount of money they can withdraw or spend.

Most credit unions will also keep you apprised of their banking activity. Some will send texts, alerting you to their activity. If they’re under 16, some will even allow statements to be sent “in care of” to the parent. However, most won’t supply that information once they are over 16, protecting their privacy. It’s a good idea to start fostering those habits while they’re young—so you can trust their spending habits as they become more independent.

If your credit union doesn’t have built-in parental controls, then you can become a joint account holder and share access to their checking account. If you choose to become a joint owner of their account, determine what happens after they reach the maximum age for a youth account. How long does the teen account last? Can they keep it through college? When do they need to switch to a regular checking account? It’s important to create a plan for the future. You’ll want an account that grows with them.

Student Loans

A milestone in your teenager’s life is preparing for college. It can be one of their most important decisions. Don’t let their education become a financial burden. With the aim of focusing on financial education, some credit unions offer private student loans as a part of their youth accounts.

While researching the best options for your teen’s checking account, verify that the credit union also provides student loans. Securing a loan through the same credit union as your teen’s account is a convenient way for them to manage all their finances in one place. Consolidating private and federal student loans into one loan may prove more manageable and potentially lower the rate. It also simplifies the process. The money goes straight to their school to cover tuition and other costs. The school refunds any money left over, so they can either save the excess or use it toward repayment.

Make sure to choose a credit union that offers loans with no fees and low interest rates. You may also want to select one that defers payments while in school, with flexible repayment terms and no prepayment penalties. Secure their education without securing overwhelming debt.

When selecting a checking account for your teen, consider choosing a credit union with services like those at Rivermark Community Credit Union. With free checking, savings, and youth CD accounts, we enable your teens to become financially responsible and establish good credit. Start your teen saving today and the right credit union will help them become financially fit.

Finding the best avenue for responsibly managing your teen’s newfound income doesn’t need to be taxing. With some careful consideration of these guidelines, you’ll be able to successfully choose the best checking account for your teen—helping them gain the confidence to easily manage their newfound finances.

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