What is a kids’ bank account?
Opening a child’s first bank account is an important step in introducing them to the financial world and teaching fundamental concepts such as earning, saving, and spending money responsibly. This experience not only helps the child understand how money works but also lays a solid foundation for their financial future.
Below, we’ll outline the key information on how to open a bank account for your child and provide guidance to ensure this experience is valuable and educational.
When is the right time to open a bank account?
There is no definitive rule for the exact time to open your child’s first bank account. It could be when they start school, receive money for the first time, or simply when you feel it’s the right time to begin their financial education. Another option is to open the account right after the baby is born, allowing you to start saving in their name from an early age.
The important thing is to understand that the right time varies for each family and depends on the child’s maturity. Some children may start learning about money at a very young age, while others may show interest when they receive an allowance or money as a gift. Regardless of the timing, the focus should be on teaching the child to manage money responsibly, with an understanding that it is a valuable resource.
How to explain what a bank account is
When opening your child’s bank account, it’s essential to involve them in the process, as long as they are old enough to understand the concept. Explain that the bank is a safe place to store money until they need to use it. Demonstrating how to check the account balance regularly is a way to teach them about financial control, showing how to track the growth of their savings over time.
You can also introduce the concept of interest in a simple and accessible way. Explain that the bank pays interest on the money saved, and the more they save, the more interest they will earn. This can motivate them to develop savings habits from an early age.
Encouraging saving
Introducing the practice of saving early is one of the great benefits of opening a bank account for children. An effective way to encourage saving is by paying an allowance or rewarding them for chores done around the house and then transferring that money to the child’s bank account. This gives the opportunity to check the account balance together, watching the savings grow over time.
Setting savings goals can be very motivating for children. For example, if your child wants to buy a toy or a special item, help them calculate how much they need to save each week to reach the required amount. Additionally, some accounts offer bonus interest when savings are made regularly. This extra incentive can make the saving process even more appealing.
How to set up your child’s bank account
Children aged 13 or younger
For children aged 13 or younger, it is usually necessary for a parent or guardian to be present when opening the bank account, either online or at a physical branch. Typically, parents will have some level of control over the account, which may include being a co-owner or having authority to supervise transactions. This control is important to ensure the child uses the account appropriately and responsibly.
Children aged 14 or older
Some banks allow children aged 14 or older to open their own bank accounts, either independently or with the help of a guardian. In this case, the entire process can be completed online. Even so, it is advisable for parents to continue monitoring and guiding the child through their first financial experiences.
To open the account, you’ll need to have a few documents on hand, such as proof of residential address, the child’s birth certificate, and the guardian’s identification document.
Encouraging financial independence
In the early stages of your child’s financial life, it’s common for parents to play an active role in managing the account. However, over time, it’s important to equip your child with the tools and knowledge necessary for them to become financially independent. Allowing them to take more responsibility over their own account is an important step in preparing them for the future.
As you grant more financial freedom, it’s also important to continue reinforcing concepts like responsibility, spending control, and the importance of saving. The earlier your child learns to manage money on their own, the better equipped they will be to make informed financial decisions in the future.
Opening a bank account for children: steps and required documents
To open a bank account for your child, simply follow a few easy steps. The first step is to choose the most suitable type of account. The most common options include transaction accounts and savings accounts, which can be tailored to the child’s age.
If your child is 14 years or older, they can open the account independently, with parental guidance. If they are younger, it will be necessary to visit a bank branch with the child’s birth certificate and the guardian’s identification.
After opening the account, make sure to regularly monitor your child’s activities, helping them check balances, deposits, and even small expenditures. Over time, the child will feel more confident managing their own finances, always with appropriate parental supervision.
Choosing the right account for your child
Banks usually offer a variety of accounts for children, ranging from savings accounts to transaction accounts. Savings accounts are useful for encouraging the habit of saving money, while transaction accounts teach children how to balance spending and saving.
It’s important to choose the account that best suits your child’s needs and age. For example, savings accounts are ideal for younger children, while transaction accounts may be more suitable for teenagers learning to use debit cards and make electronic payments.
Opening a bank account is a valuable opportunity to introduce your child to the journey of financial education. By guiding them along this path, you are preparing them to make responsible and independent financial decisions in the future.
