Should Your Child Have A Bank Account? 4 Ways They Benefit
As your child turns into a teen and then into a young adult, when should you introduce them to the world of bank accounts? The answer depends on each family, but it may be earlier than you think. Why? Here are a few compelling reasons to take your kids to the bank and get them started on a path to financial success.
1. There's Little Minimum Age Requirement.
Many people don't really consider their child's banking needs much before the child turns 18. But in fact, most teens and even pre-teens can open a bank account with their parent's involvement. In fact, many banks and credit unions have accounts specifically designed for children of various ages.
2. It Develops Good Habits.
If your child earns any of their own money, starting a bank account begins the development of lifelong good money habits. A savings account encourages children to save part of their earnings. And a checking account teaches financial skills like balancing and monitoring transactions as well as learning to prioritize purchases and budget for what is available. They also learn soft skills like communication, problem-solving, and setting goals.
3. It Helps Establish a History.
Banks tend to offer better terms and products to loyal, established customers. So, the earlier your child becomes an established customer, the sooner they will have improved access. If they plan to buy a car at 18, for instance, being a customer with a good history may net the teen better interest rates and lower payments on a car loan. You may also be able to avoid having to co-sign on loans and help them get a bank credit card to begin their credit history.
4. Your Child Learns Independence.
If their parents continue to handle all responsibility for daily living activities, the child could be hindered in developing their own independence. By opening and managing their own account, they learn valuable skills and start making their own decisions while still in the safety of the home. They will grow in well-earned confidence, which will be useful if they decide to go away to college, get married, or simply venture off on their own track.
There may not be anything stopping you from establishing your child as a customer at your local bank. The obstacles are few, and the benefits will last a lifetime. Learn more about banking accounts by meeting with a bank representative today.