Is your teen thinking about opening a bank account? Bank accounts for teens have many benefits and can hold many financial lessons that will be useful in the long run. A teen account is a joint account with a teen and their parent or guardian co-owners. The teenager is the primary holder of the account, and they can make withdrawals and deposits as they want.
If you’re considering opening a teen account for your teenager, you might be wondering how they work. In this article, we’ll walk you through all you need to know to get started; let’s dive right in.
What Are the Benefits of Bank Accounts for Teens?
With a teen account, teenagers learn how to set up deposits, budget, withdraw, and save towards a financial goal. These are critical financial skills that teenagers will need as they become adults.
How Teen Accounts Work
You need to know several things when opening a teen account with Partner Colorado Credit Union. Below is a breakdown to get you started.
- Age Limit: There’s a strict age requirement for bank accounts for teens. The teen account is designed for teenagers between 13 and 17. Therefore, kids between the age of 12 and below do not qualify for the teen account.
- Type of Account: Teens can open savings or a checking account. With a savings account, you can earn interest on your account balance. However, a checking account comes with a debit card. Teens get four free ATM withdrawals monthly at only CO-OP ATMs. The checking account also comes with optional overdraft protection.
- Money Management Bonus: When you open a teen account, you can complete the online education module about money management. Once you complete and pass this module, you’ll receive a bonus $25 cash deposit into your account. This way, bank accounts for teens allow them to learn while they earn.
- Teen CDs: Teenagers can open a CD where they can save towards a financial goal. This account comes with more interest as teenagers won’t have access to the funds for a set amount of time.
- Automatic Allowance Transfer: As the joint owner of the account, parents or legal guardians can set up automatic allowance transfers from their personal account to the teen account.