Kid's bank account: How to open a bank account for a child

What are children's bank accounts?

Opening a child bank account can be a win-win situation that helps your kids to learn important financial lessons while managing their money. They can discover how to budget, save, and track their spending with their own account. 

There are no federal laws prohibiting minors from opening bank accounts on their own. However, there are state laws requiring a bank account for a minor to be opened by an adult. Even In those states where there are no legal minimum age requirements, most banks require an adult to open a minor’s account. 

If you’re opening a bank account for a child you have a couple of options. The type of account you choose depends on your goal. If you want your child to have access to the funds in the account you could open a  joint account (where each account owner has ownership of and access to money deposited). 

The other option is an account that you manage for your child until they turn 18 when they take control of the account. This is called a custodial account.   

What are the alternatives to kids' bank accounts?

The main alternative to a kids' bank account is a debit card like Acorns Early. With a prepaid card, your child gets all the benefits of a bank account but with an extra helping hand from you. It's a safer way for your kids to learn about managing money as you can set spending limits, but your child will still have the independence of having their own debit card. 

Prepaid accounts are excellent for younger kids who need more guidance with their spending habits. But they’re also suitable for teens as they enable them to have more control over their budgeting, saving, and spending.

What age can a child have a bank account?

As a parent, you can open a bank account for your child from birth – as long as they have a social security number. If you want your child to be able to use the account, you’ll need to wait till they’re 13 years old. By comparison, it’s easy for a parent to apply online for an Acorns Early card for a child between 6 and 18 years. 

What age should I give my kid a bank account?

If you're unsure whether your child is ready for their own account, financial experts at Cambridge University have found that core behaviors and habits are formed in children by age seven. Meaning that most children have grasped how to recognize the value of money and count it by the time they reach the second grade in school.

That said, only you as a parent know when your child is ready for more independence around managing their own money. If they’re starting to ask more money questions, want to spend money online, or go out alone with friends more often, then it may be time for their own debit card.

Some questions to consider include the following:

• How responsible is your child? 
• Do they understand the value of money?
• Would they use a debit card responsibly?
• Are they able to save money? 

As specialized kids’ bank accounts can’t be opened until the age of 13 it pays to help younger kids get started on their financial education by using a debit card. A card like Acorns Early can help teach them good money habits to prepare them for the time when they have their own income and an adult checking account. Plus, there are many great ways to teach them about money from an early age and help build their financial education with our in-app Money Missions. 

Which types of kids' bank accounts are usually available online?

Some children's bank accounts offer online access for the child and the parent. This allows parents to monitor their child's spending, set budgets, or track progress toward savings goals. 

• Checking accounts: Kids’ checking accounts usually come with debit or ATM cards but will require the child to be thirteen years old. 
• Savings accounts: These accounts offer interest on deposits and are a great way to teach your child how money saved can grow. 
• Prepaid debit cards: Technically, these aren't bank accounts. But, they can be an excellent option for children aged six to use and save money and offer more features than traditional bank accounts.

What are the benefits of a children's bank account?

There are many benefits to your child having a bank account, the most important one being developing good financial habits.

 Other benefits include:

• Being able to make purchases online or in shops
• Having a place to manage their money
• Participating in the digital economy
• Making and receive payments
• Being able to withdraw cash
• The ability to set up direct debits or standing orders
• Having salary paid in when they have a part-time job
• Setting up automatic savings from their allowance will help them see their savings grow over time and teach them how to save for future goals.
• Having a set amount of weekly money will help them start learning about budgeting in a real-world experience. 

Are there any disadvantages to children's bank accounts?

A checking account for kids will include debit or ATM cards, but most banks require the child to be at least 13 to use one. 

Alternatively, Acorns Early gives your child all the benefits of a debit card from age six but allows you to keep an eye on their spending habits and set limits via the parent app. We also have a strict merchant block, so kids aren't spending in places selling age-restricted items.

Consider which features come with each bank account

When opening a bank account, it's wise to research the available options, as children's accounts differ in features. 

 Look for:

• Ability to download an app or access online banking
• Trustpilot reviews to give you a parent's eye into how the account works
• Are there any fees?
• Will your child get a debit card or a card for ATM use only?
• Interest rates
• What happens once your child reaches 18?
• An option to block and unblock the card
• Parental controls: Does an account offer parental controls that allow you to view and manage your child's account from your own app? With Acorns Early, parents have a separate app to manage parental controls.
• Financial education: Do kids get access to financial education programs to help them learn about money and how to manage it? At Acorns Early, we have the in-app Money Missions to help with this.

How to open a bank account for a child

How to open a kids' bank account varies from bank to bank, but the great majority of banks require you to set up the account in a branch with your child present (though a few let you do this through a banking video app).

Can I open a bank account for my child?

Yes, any parent can open a kids' bank account with specific documentation. Grandparents and adults with parental authority over a child can also open a bank account for a child. However, they must also provide documentation to prove the child's identity and residency. 

In some instances, the adult opening the minor’s account does not have to be a parent or guardian. Other family members or friends may be permitted to open or contribute to a custodial account. 

What do I need to open a bank account for my child?

To open an account for your child, you’ll need to take along documents including:

• Your child’s name, birth date, and social security number 
• Your own social security number and a valid picture ID (like your passport or driver’s license)
• Your address, email, and phone number

Can I open a bank account for a child online?

Generally, you can't open a bank account for your child online, as banks need to do additional ID checks. However, with Acorns Early, you can open an account as early as six years; we only need a few details to do a background check.

How much does it cost to set up a bank account for a child?

Bank accounts designed for kids and teens often waive the usual fees and maintenance charges that apply to most other types of accounts. But do check before you apply. 

Accounts designed for children typically allow you to open one with a small, dollar amount. But initial investment requirements and minimum account balances can vary from institution to institution. So again, check the rules before applying. 

Whether you decide to open a joint or custodial account, there will be tax and legal issues to consider. Talk with your tax advisor so you know what to expect.  

Can both parents manage their child's bank account?

The adult who opens the minor’s account has access to the account. Acorns Early, on the other hand, allows both parents to manage a child's account and set parental controls, so both parents can easily track and manage a child's money and spending habits.

What's the difference between Acorns Early and a bank account?

Acorns Early isn't a bank, but we offer the same functionality you would expect with a traditional bank account. Some of the key differences between Acorns Early and a bank account are what we offer:

• An app with a separate parent and child view
• Instant notifications about your child's spending
• The ability to set spending limits at ATMs, online and in-store
• An option to create paid tasks to teach kids about earning
• The ability to freeze (and unfreeze) the card
• Options to restrict where a child uses their Acorns Early card
• Automatic weekly payments or one-off payments
• Prepaid debit card for children aged six and above 
• Automatic saving goals
• An option for friends and family to send money to your child's account using Giftlinks
• The in-app Money Missions, designed to accelerate financial literacy, helps kids develop their money skills through a series of interactive games and quizzes 

How can I open an Acorns Early account for my child?

It’s easy to apply! You don't need to provide any payment details, and your children will receive their cards within the next five to ten business days. Once their debit card arrives, you can activate your parent account and the cards by going online or by using the app and making a minimum $5 deposit. 

Acorns Early includes an app for both parents and kids, complete with smart tools to help kids to earn, save, give and learn with Money Missions our bitesize interactive lessons.