When is the right time to open your child’s checking account?

Opening a savings account for your child is a pretty easy decision. You want them to start saving, understanding the difference between needs and wants, and maybe even initiating plans for future purchases.  

The tougher decision is determining when your child should open a checking account. A checking account enables you and your child to enter the world of writing checks, using a debit card, balancing the account on a monthly basis, and online banking. You get the idea. And don’t worry too much – you’ll be able to monitor the account if your child is a minor and you’ll also have to be a signer on the account. 

For me, the decision became a simple one when my son went to dinner with his friends and their dates, before a high school dance. He ended up helping several of his friends pay for their meals by splitting the bill. We opened a minor checking account the next week, he got a debit card, online banking login, and his journey to financial independence began. He never split the bill after that. 

For my son’s routine school purchases, weekend lunches, and any needs, I transferred money from my account to his using online banking. (In today’s world we’d use Venmo or PayPal.) He had a level of independence his friends didn’t have, and I knew exactly what he was spending his money on. This continued through college and up until he and his wife opened their own joint account. It also gave me an opportunity to talk with him about how he was managing his money. 

There isn’t a magic age when your child should open a checking account. Rather, the decision should be based on their need for one and their ability to manage the account properly. I will say that you should open the account while your child is in high school to prevent surprises when they go to college. 

 Key milestones to prompt opening their checking account include:

  • When they get their first job.  
    • This step presents the opportunity to discuss taxes, direct deposit, and budgeting. 
  • When they start attending events independently. 
    • Do you really want to go to the mall with them every time?  
    • This stage also covers going to restaurants and festivals with their friends. 
  • School-related expenditures. 
    • This includes when they want to go to book day at school on their own and field trips. 

In each of these cases, a debit card is a much safer way for them to pay than having them carry a significant amount of cash. 

Monitoring your child’s checking account is easy. Since you’re a co-owner of the account, you can access it through online banking and the bank’s mobile app. You can keep tabs on account balances, transaction histories, ATM withdrawals – and more importantly – transfer money to them in an emergency. 

Opening a checking account with your child is another step towards their financial independence. It also provides you with first-hand knowledge of how they will manage their finances when they go to college. The financial habits they form under your tutelage will be the financial habits they use for the rest of their lives. Just make sure they are good ones.  

For more information, some courseware and workbooks visit www.bankwithfidelity.com/finlit 

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Robert Baer is a Vice President at Fidelity Bank.  He coordinates Fidelity’s Financial Literacy initiative.