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Banking for Teens
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Banking for Teens
My son is turning 16 and I'd like to get him set up with his own bank
account (finally). I'd like him to be able to deposit money and use
an ATM in Berkeley for withdrawals. However, every bank that I'm
looking at charges monthly fees that will eat up the limited amount of
money he has. Are there any banks that still give free accounts to
teenagers? How are other parents handling this issue? I'd like my
son to learn how to manage his money and banking needs before he goes
off to college in a few years, but I don't want to pay an arm and a
leg in banking fees in order to do so. Any suggestions? Thanks!
- down with monthly fees
My teen got an account at Bank of America that doesn't charge fees for
full-time students. He has a debit card that he uses to get cash, and
he deposited his paychecks when he had a part-time job. The only
caution is that they will charge high fees if he overdraws his
account, but that hasn't happened so far.
We have a Teen Checking account with Wells Fargo. It was free of
monthly service charges when we signed up (2 yrs. ago). We also have
on-line control of the account, linked with our other (adult) accounts.
*Often a .01 Teen Balance*
USAA is a wonderful bank. No checking account fees (they pay YOU
interest instead, as it should be)! They have several programs for
kids and teens (i.e. a first start savings account with checks, a
credit card controlled by parents). They don't have any branches -
it's all online. They send you pre-paid mailers to deposit your checks
by mail. The best part is you can go to ANY ATM from any bank and THEY
pay all those fees. Go to usaa.com and check it out.
--mom of a money-savvy pre-teen
The easiest way to get a free account for your teen is to link it to
one of your accounts. If you have a savings account or a mortgage at
one of the local banks they will give you free checking and will give
you a secondary acct. I set up both kids with myself also on the
account. It came in really handy when they left for college as I
could automatically transfer money from my acct to theirs for bills,
etc. You can set it up so that you have access to their acct (and can
do some initial monitoring - or not) but they won't have access to
Another way is if they have regular automatic deposits made to an
acct - so if they have a job - or sometimes you can arrange to have
money transfered from your acct to theirs on a regular basis (maybe
you can do their allowance, if they get one, on a monthly basis).
I have ''student'' accounts for both of my children (13 and 17) set up
with Wells Fargo, where I've had an account for years. (This is not
an endorsment of Wells Fargo - just a description of what works for
us.) Their accounts are linked to mine, and I automatically
transfer their monthly allowance on the first of each month. They
both have ATM cards, but we've never ordered checks for them because
they really don't need them. Because I'm a long time customer and
keep a minimum required balance across all of our accounts, I don't
pay anything for theirs. WF did say it was unusual to set up an
account like this for an 11-year old (when I first set this up for
my youngest daughter.) They said they were doing it because I had
been a customer for such a long time.
An added bonus is I can see how they use their ATM cards, and can
confirm they haven't overdrawn their account at any time. I think
having a predictable allowance and knowing how much money they can
spend has allowed them to learn money management. They are both
aware of what things cost, and have never overdrawn their balance. I
plan to continue using the same approach next year when my 17-year
old goes off to college.
My husband and I have free checking. I have a joint account with my
son. So the benefit was extended to him. BTW, with the account setup
as joint I can transfer funds to cover the cost of textbooks.
Bank of America has a student checking account (CampusEdge) that has
no service charge and free ATM withdrawals, online banking.
Mechanics Bank offers an account, linked to the parent's account,
which has no monthly fees. Since the adult account doesn't have
monthly fees either, that works out well.
Try Mechanics Bank, they have a teen account.
My teen has an account at Mechanics Bank on Solano Avenue. No account
fees until she's 18. Bankers there give personal service, they get to
know you, and they are a community bank so she has the added sense of
relief that she is not participating at any of the banks that have a
notoriously poor record of high fees, poor customer service, and
playing a part in the economic woes that our country faces. They have
branches in downtown Berkeley, Albany, and in some surrounding cities.
Fees that are charged by other banks to use their ATMs are also
forgiven by Mechanics.
Happy at Mechanics
We opened accounts for our teens (13 year old twins) at Union Bank
called ''Teen Savings''. It is a savings account with no minimum
balanace ($1) and pays interest (very low, but better than nothing).
Right now we've given them an ATM card so they can deposit and
withdraw money. You also get free on-line access.
In a few years we'll give them a debit card. That uses a linked
account that you move money into from your Teen Savings account.
We opened them with me as a co-owner rather than as a custodial
account so they could access the account on-line by themselves.
We have our checking and savings account at Union Bank too and when
I log in, I can see their accounts as well as ours. I can also
transfer money directly from our accounts into their accounts. That
is how I handle giving them their allowance now.
Check it out.
Parent of Teens
My boys are now 18 and 21. Many years ago I set them up at Wells
Fargo where I have had a checking accout since 1977. there was no
charge as they are technically my accounts. I have access to them
and can watch transactions and transfer funds. They do not have
access to my accounts. I think they both have checking and savings
accounts with atm cards
If you have an account with no monthly fees, link his to yours.
My son has the type of account you're looking for through Wells Fargo.
The bank waived the fees because we have checking, savings, and
mortgage through the bank. Maybe your own bank would do the same? It
is really good to go into the bank and sit down with someone, rather
than try to do it online or over the phone. I feel you get better
service and swing deals that way.
If you keep enough money in your accounts not to have to pay fees
yourself, then you may be able to have a joint account with your child
and also not have fees. It's a good idea to have a joint account so
you can access it easily online for transfers, to negotiate with the
bank, and to keep an eye on what's happening in general. The key
thing is to start with an account that does NOT have a Visa or
Mastercard debit option. That's for stage two, when they're familiar
with the basics. Then they can use it more places, including for
iTunes. It's important to explain to your child about the overdraft
fees they will rack up (much bigger than any regular account fees) if
they sign for something without having enough money in an account, and
the additional fees if they don't correct it as fast as possible.
They should also know other little tricks of the banks, such as the
two dollar charge for using other banks ATMs, even for balance
inquiries, plus the extra two dollars or more if they use other banks
ATMs for withdrawals. After many dramas with my older child, I set my
younger one up so he could check his balance using his cell phone
before trying any transactions. So then he entered his account
number to be able to watch ''free movies'' online, and predictably this
was a scam that led to having to change the account number and contest
the charges! Argh.
Check out Bank of America. I just had my (16 year old) son open up
his first bank account there and overall, it was a very good
experience for both of us.
There are no bank fees for students, the representive (Nikki at the
Solano Ave. Branch) was super helpful and patient. She seemed to
know exactly how to handle teens (as if she were specifically
trained for it). She also had a wonderful booklet put together by
BofA that explained everything a young adult would want to know
about managing their finances. It gives detailed examples of how to
manage your checking/saving account, how to write a check, how
interest works, etc. The other neat thing was that BofA just came up
with a new service that will text you when your balance is under,
let's say $25.
There's a lot more info than what I'm mentioning here so I suggest
you call or stop by.
Teen Banking Parent
Our teen daughters have checking/ATM accounts with Mechanics Bank, and
it's been a great way for them to learn to manage their money. There
are no monthly fees, and ATM withdrawals are free of charge from
MechBank ATMs, and they get two withdrawals per month free of charge
from other ATMs. I believe the only caveat is that a parent must have
an account at MechBank as well, which we do. We love this bank - it's
like an old- fashioned neighborhood bank in terms of the friendly,
Our girls can check their account online, we can transfer their
allowance from our account into theirs, they can deposit their
babysitting earnings, etc. (They also have a savings account, which
is where most of their earnings go, whereas the allowance goes to
checking.) We give them an allowance which covers their clothes,
books, toiletries, movies and meals out. They have to stay within
their budget or earn more. It's worked out very well. We pay for
school supplies separately, but discretionary spending is theirs to
figure out. Hope this will stand them in good stead when they're in
Here's the link to their site:
Money Managing Mom
Our kids each opened a Student Savings Account at Bank of America.
No fees, no minimum balance. There may be some limit to how many
withdrawals can be made per month. My oldest turned 18 and opened a
checking account at Wells Fargo-- again, no fees, no minimum
balance. Both kinds of accounts come with an ATM card-- whether
there are withdrawal charges depends on what ATM you use. Lifetime
free checking is also available at Bank of the West, a very
reputable local bank in Berkeley and El Cerrito.
I just setup my three teens onto Paypal student credit card and so far
I have no issues, setting it up was done from home, as long that you
have a paypal account the process was fairly straightforward, they
received their cards mailed home in less than 5 days,
adding money takes no time in case of a missing lunch or extra fare to
pay, log in paypal and add money to your child account that is it, my
son called me and was trying to pay a lunch with its card which was
activated but I had not yet added money to it, the card had been
denied at the merchant and the reason for him to call me, i logged in
paypal added 10$, told my son to give another try and it worked right
away, I was impressed.
You can also setup allowances with an automatic schedule, there are
also permissions for its usage but i have not really checked them out yet.
Cost? its free!
There is a charge if you use the card for selling stuff.
There is a one dollars charge if you get money directly from an ATM
plus the charge of the ATM's Owner. same stuff as regular bank when
you get from a different ATM.
No charge to transfer money to the account.
we bought stuff at Walgreen and used the debit feature, we cashed out
and did not got charge extra for getting cash, i believe it should
work in any store that let you pay with ATM.
They did try to purchase game points with one of those online games
where the transaction was requiring you to be 18 and it refused, since
the paypal ask for the birth date, it could be that their age shows up
when they try to make a purchase, a good feature from my point of view
but it could be seen as some privacy issues.
my kids are 13, 14 and 16 so far this card give a much better
understanding of financial transactions, it has been great.
I did the same thing for my teen when he turned 16. He is not charged
a fee, but that's probably because it's an account linked to ours, and
we are charged (sometimes) or not depending on monthly activity or
It's with Wells Fargo.
He has really liked using his debit card to purchase stuff. Downside
is that he has lost it once (left it at a fast food restaurant). But
he then went without for a week while waiting for the replacement, so
I think the lesson was learned.
I have an automatic transfer into his account from mine so I don't
have to think about it. And I get email notifications of his spending,
which I wanted for the first year so I could see how he did.
Only big downside is that if he overdraws, it draws funds from my
account. So there is a risk. But the control of the email
notifications would limit the amount of the risk, plus you can define
the limits of daily withdrawals.
hope that helps. I think it's a good first step!
- mom of banking teen
If you have military service in your background, I highly recommend
USAA. Both my teens have free accounts there that refund fess from any
ATM, so one of my kids was able to easily keep it when she went away
to college. There is good online access, and they even send you
postage paid envelopes for deposits if you request them. And they have
a very safe rating. We have our accounts (including several types of
insurance) through my father's military service, so it can pass
through generations, though I'm not sure of all the rules on that.
I think Wells Fargo also has a free teen account. In our experience,
you want to be sure to be a cosigner and see the statements, but don't
sign up for automatic overdraft protection. If they overdraw, they pay
the $25. It hurts, and learn to pay attention. Teens these days aren't
so good about actually balancing the checkbook, but they will check
their balance online before they step out the door to go shopping, and
know they can also check at the ATM. Also make sure that they get a
debit card; they'll need that for online purchases, and don't get
anywhere near a credit card. We've told our kids so many horror
stories about credit cards and college students that they run
screaming for the shredder whenever they get an offer (which is
monthly from American Airlines!)
all for financial literacy
Teenager has control for the first time over a checkbook. What has worked
you to avoid overdrafts?
Does any bank offer better services than others? We just found out our
in the middle of a class action settlement about charging too many
That's not good news, but we also need to be able to set up a method to
within budget and account balance.
Looking for positive balance
I don't know if it's too late to make a different choice in
a financial institution, but you should look into a credit
union. Here's why:
1. You teen would be required to open a Share Savings
Account. This savings account would be the first target for
overdrafts and because it is his money, the automatic
transfers range from free to not over $10.
2. Your teen could check the account using a cell phone -
either online or by calling a phone number - funds could be
transferred as needed.
3. Even if your teen racks up $100 in fees (easier at a
bank than a credit union) it is best to learn the lesson
now rather than later.
My thoughts are rather harsh - I believe that a teen should
have $300 or more in their savings, with a proven track
record of systematic savings before they should have a
checking account. By doing so, they have proven budget
ability. Also, the teen should have some income - even if
it is occasional income - other than parentsí money.
Financially Responsible Parent of a Financially Responsible Pre-Teen
Instead of a checking account I highly recommend a visa buxx
card instead. It is a pre paid charge card but, with a
limited amount determined by the money you arrange to have
put in. You can get email alerts about spending. You can
establish weekly cash draw amounts. You can view the
expenditures on line.
It has much better accountability than a checking account /
atm relationship. Several banks offer them, just google visa
This is not a matter of finding a bank that offers better
overdraft charges. It really is a parental responsibility
to teach your teen how to balance a checkbook. Start by
going over his checkbook every week so you can oversee
that he is recording check amounts in the right places.
If that works well, then lessen the oversight and check
only every month.
The first time you sit down with him, tell him what the
overdraft charges are AND tell him what the consequences
of overdrafting are. That the check bounces and the
company he wrote it to doesn't get paid and they get mad
and then they try to deposit the check again and he gets
another overdraft charge. Work it out clearly on paper,
with examples, so he can see how the charges can add up.
Think of the overdraft charges that the bank gets as a
lesson for your teen. The charges are the clear,
financial consequences. If he doesn't want the
consequences, then he needs to balance the checkbook every
time he writes a check. And if he doesn't follow this
simple plan, then he loses money. Shouldn't take too long
for him to learn that.
We had this problem with our first teenager. The bank does
forgive the first overdraft of a student, if you know to
request it. You need to discuss with your child that if they
sign a docket for the transaction, it doesn't go through on
the same day. The best way to avoid overdrafts is to start
kids with a card that is not also a credit card ie has no
visa or mastercard logo. That way they can only use it at
the bank machine or as a debit transaction (using the pin
number). Then it will be refused if there are insufficient
funds, rather than allowing the overdraft to happen. On
the other hand, after a series of overdrafts that she had to
pay off (with some help) my daughter is now much better than
I am with a real credit card.
Has anyone found a bank that will give a 14 year old a
checking account with a debit/ATM card for low or no fee?
WaMu gave my 16 year old such an account, but will not
approve one for my 14 year old. This is for depositing
his bi-monthly allowance/budget, having him be responsible
for the deposit and management of the $, mostly with the
ATM card. Thanks
My 14-year-old son was depositing money in his savings
account at Wells Fargo on Solano Avenue, and the clerk asked
if he wanted a checking account with a debit/ATM card
attached. It's free and has worked out very well for him.
His savings account card only allows him to deposit/withdraw
money, but with the check card he can make purchases. He
can also transfer money between the two accounts online
We've had a savings account at Wells Fargo for several
years for my 15 year old. It was set up by us, since he's
a minor, but we were able to get him an ATM card to
deposit and withdraw money. The catch is that the number
of transactions, especially withdrawals, are limited since
it is a free savings account. I'd think you could set up
some type of similar account, even if there was a modest
Over the summer, my 14 yo opened an account at BANK OF
AMERICA, that includes an ATM card
Regarding both teen checking accounts and allowance.
Check out the Bank of America. They have an account for
teenagers that comes with an ATM card. You may have to
have your name on the account also. We've done that for
all of our children when they reached high school.
By the way, regarding allowance. We negotiated a deal
with the kids. They are paid a sum weekly, one week's
allowance goes to savings, one goes to checking. They can
take money out of savings if they want to, but are more
likely to leave what's already there for long term goals.
b of a customer
A checking account (and by association a debit card)
requires that the holder be of legal contract age (18).
Wherever you go, you will probably be required to co-sign.
That being said I wanted to put in a pitch for Mechanics
Bank. I bank at the North Berkeley/Solano branch and find
them to be the nicest, most personable group of COMMUNITY
and community-minded bankers. They saved my friend's 80+
year old father from being scammed by someone who ''just
needed him to get some cash...'' because they knew him and
knew that it was unusual for him to be asking for that much
If the parent qualifies for free or low-cost checking they
will pass this on to the child. Worth investigating
Support our local banks
I second the recommendation of Mechanics Bank. We use the
one on the Arlington and have always received wonderful help
from the bank manager - Xavier Abrams. Both of our kids have
checking, savings and debit cards that work for all
purchases just like a credit card except car rental which
they can't do anyway. Online banking and bill paying work
well and we can monitor their accounts with their
permission. And if they ever had a problem, they just called
Xavier directly. Small, local and personal. www.mechbank.com
The best thing about them is that they refund ALL ATM fees
so both kids have kept the same bank through college, one in
Portland and one at Mt. Holyoke. They even refund fees out
of the country as well. They both signed up for direct
deposit of their work study checks which worked flawlessly.
It was nice to get to campus and not have to deal with all
the ''free'' offers from VERY agressive banks wanting to hook
your child with a credit card. Just like the cigarette
companies, they know if they hook them early, they have
customers for life (with debt.)
Happy Mechanics Bank customer
Re: Helping teen manage her money
We converted my daughter's savings account to a ''college
checking account'' (at Wells Fargo, with my name included
since she isn't 18 yet). We did this so she could make an
unlimited number of ATM transactions per month without
fee. The only thing was that she was able to overdraw the
account. She withdrew $20 from non-ATM (i.e., store)
machines and was charged the $1.50 store fee, the $2 non-
network fee by WF, $22 overdraft fee by WF, and got a $20
bill. (Yes, that's right, $45.50, of which she got $20)
She did this FIVE TIMES. WF also charged $5 per day for
each business day the account remained overdrawn. I was
gone for a few days and came back to notices from WF re:
all of this. I closed the account. Because she was getting
the money NOT directly from WF, there was no way for the
machine to ''know'' that she had no funds. Obviously, she
knew she didn't have funds, but hey, if the machine gives
it to you, maybe it's true! Buyer beware!!
Duped and disappointed mom
My son had a similar experience with an ATM card and with each
overdrawn fee the charge goes higher and higher. He called Bank of
America and they did lower the charges for him that one time.
ATM cards are misleading because the kids think that if they can get
money or make charges that they have money in the account. My son
had mostly small charges ranging from 25 cents to a few dollars with
overdraft charges of up to $59 per charge.
My son was great with his checking account since age 12 and my credit cards
in his name since 13. At 16 he could no longer handle money, with many
charges that he wasn't paying (me). At 17, Wells Fargo opened a college
account for him *without* my involvement. I have no idea how he's dealing
with it now and fear he'll start out with a negative credit rating. I agree,
beware the college accounts.
this page was last updated: Oct 27, 2010
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