Whether you're expecting, a new parent, or have been a parent for years, opening a bank account is a great tool to help your child's financial future. This week, we tackle benefits of opening a bank account for your child and how it can benefit your family in the long run.
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Opening an account for the future
You can open a savings account for your child that you can later turn into a checking account once their older. Talk to your local bank (we recommend finding a local bank so your child can visit the bank if they have any future questions about their account) to find which type of account works best for you. Some banks even offer special accounts or interest rates for minor accounts. Since your child can't technically sign up for an account as a minor, your name will also be on there as a joint account. Then, when the child is old enough (13 or 18 depending on the type of account and bank) you can remove your name. Some fees may be included, so talk to your bank to see if you can add your new joint account to an existing account. Shop around for ideal interest rates, too!
Teaching your child financial responsibility
Once you feel your child is old enough, you can give them access to their account. Some banks allow you to set spending limits and monitor spending, too. Additionally, it's never too early to teach your child how to budget with apps like YNAB and Mint! With a checking account from a young age, you can also help your child establish a credit score early on. This will primarily help them when they're applying for student loans, car loans, or even just getting a credit card when they get older.
Ultimately, it is your decision when to open an account for your child and how you choose to teach them about financial responsibility. If you have more questions, contact your financial adviser or local bank for tips on how to get started!
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