Helping to develop a sense of financial responsibility in a child requires a lot of time and dedication, especially since many kids believe money grows on trees. One great way to get your child excited about developing important money management skills is by opening a kids' checking account.
Numerous banks and financial institutions are offering great checking account options for today's youth, which makes opening one easier than you might think. Here'swhat it takes to get your child started with a checking account.
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What are kids' checking accounts?Over the years, banks have recognized the value in teaching children financial responsibility. As a result, some have created a type of checking account specifically designed to allow kids to deposit and withdraw money, as well as write checks.
These checking accounts for kids provide you with a way to show your child that money should be managed, not just spent, while making these concepts less abstract by letting him put them into practice.
Just keep in mind that, because a child under the age of 18 is unable to legally enter into a contract, you as the parent would sign up your child up for the account.
Benefits of opening kids' checking accountsOpening a checking account for your kids could offer a number of great benefits. Here are just a few:
- Practical education.You have an opportunity to show your kids how to write checks and use basic banking services while exploring the value of money management.
- Early introduction to fees and penalties.When taking part in this financial system, there are rules to follow and repercussions for breaking them. If your children want to sidestep the rules set up by the bank, they will get an early introduction to fees and penalties -- lessons that will carry over into adulthood.
- Understanding that saving is better than spending.Opening a checking account will show your child that putting money away for safe keeping is better than leaving it lying around, waiting to be spent.
It's alsoimportantto note that opening a checking account early allows your kids to get a jump on their peers so that, by the time they're ready to go off on their own, they will be less likely to feel intimidated by the banking system.
Keep reading: 5 Money Lessons Your Parents Taught You That Are Wrong
Banks and credit unions with checking accounts for minorsThere are a number of checking options out there for kids to take advantage of (with your permission, of course):
- Young Americans Bank.This bank is located in Denver and is a part of the Young Americans Center for Financial Education, which is dedicated to providing financial education to individuals under the age of 21. The bank offers checking and savings accounts, loans, CDs, and even credit cards for kids to use.
- KeyBank.Based in Cleveland, KeyBank has locations in a number of cities around the country, including New York City and Indianapolis. It provides a Student Checking Account to high school juniors or seniors who are age 16 and over and comes with no ATM fees, check fees, or monthly balance requirement.
- Advia Credit Union: This credit union offers membership to individuals who are at least 15 years old and living in certain areas of Wisconsin and Illinois. Young members can open a Teen Checking account that comes with no minimum balance requirement, no monthly fees, and unlimited check writing.
Other banks around the country offer checking accounts for minors. A few include Wells Fargo and USAA.
Also, in addition to opening a checking account, you could consider opening youth CDs, educating through books and taking advantage of other innovative ideas to teach money management.
Financial responsibility is incredibly important, especially since today's young people are living in the middle of difficult economic times. By getting your kids started early, you are giving them the opportunity to develop the money management skills they'll need well before they enter adulthood.
This article originally appeared on GoBankingRates.
The article Why Your Kid Needs a Checking Account originally appeared on Fool.com.
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