Get started
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Teach Me

How Old Do You Have to Be to Open a Bank Account?

August 20, 2018

Is there an age-limit on financial products and services? Here’s your answer.

3 min read

Teaching your child about money and banking is a critical life lesson.

After all, money issues are regularly seen as the number one cause of stress in the United States. By teaching finances to your children, you won’t only help them build a better financial future,  you’ll also help them build a healthier future overall.

Setting up a bank account for your children can help them learn financial basics.

Read on to find out the basics.

Bank accounts for kids

A child can have a bank account at any age, as long as a parent or guardian acts as co-signer on the account.

Numerous financial institutions offer savings accounts for children. And these accounts can help show your children the power of saving, while also allowing for controls that will limit debit card access or cash withdrawals.

What does a minor need to open a bank account like this? All they need is a parent willing to become a joint account holder. Some banks or states may have their own policies or regulations and you should always inquire about additional needs before opening an account.

Of course, with a joint account, each party has ownership over the account. Parents will be liable for any fees or spending incurred by their child and should practice good monitoring over the account to ensure it is being used responsibly.

Once a basic account is open, parents can help children see the value of saving and budgeting.

Showing them how to plan, budget, and save for that purchase is a good first step in helping children prepare for bigger expenses later in life.

Parents can do this by tracking spending from the account to show young children how small purchases can affect their long-term savings goals or by putting things into perspective for them in a way they can understand, for example: How many days of chores will it take to reach their goal?

Bank accounts for teens

As your children grow older and enter their teenage years, their banking needs will also change and become more complex. Teens may get their first summer jobs, save for their first car and college expenses, and or they may start to pay for personal items like clothing.

Parents will still have to be joint account owners with their teens, who are considered minors. Nevertheless, the focus will likely be on an unlimited, no-fee checking account that allows for more transactions. As teens begin to earn income and make more regular purchases they may find that their childhood savings account does not meet their needs.

Parents might be wise to begin to give their teens more autonomy over their finances. However, keep in mind that the account is still jointly owned and it may be important to verify that teens cannot run up hefty bank fees or overdraft fees.

What is a custodial account?

A custodial account is a savings account that parents can contribute money into for their children.

These funds are considered a gift and are the child’s money as soon as the account is opened. However, the child does not actually have access to funds, usually until they turn 18, or until their parents choose to give them access to the money from the account.

A lot of parents choose custodial accounts because of the flexibility they allow when saving for children: The funds can be used for education or any other purpose that benefits the child.

Custodial accounts may not be ideal for teaching children short-term lessons about saving, spending, and budgeting, but they do show the benefits of long-term saving and earning interest.

By using a combination of accounts with long-term and short-term savings goals, parents can provide their children with a solid base of financial knowledge that will help them well into the future.

Interested in teaching your child more about finances Stash Academy for more!

Invest in their futures

Open a custodial account for the kids in your life

Start now

By Stash Team

Next for you
I Have $17.76 in My Bank Account. Is That Enough to Start Investing?

Investment Profile

Legal Cannabis Industry

Get all the details on investing in marijuana and the cannabis industry legally.

Learn more
Explore more articlesChoose a topic to learn more about
Careers social media budgeting Technology Retirement

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.