You need a bank account as a teen, especially after you begin working. It allows you to deposit checks, and gives you access to a debit card – a must if you want to buy virtually anything online. It also helps you move money from cash to investments, and if you want to open an investment account, you need to have a bank account.
There are two types of bank accounts, savings, and checkings. However, in this post, we’re only going to focus on checking accounts because if you are investing, that is where the majority of your money will be, and you will have no need for a savings account.
Because you are under 18, you legally can’t open a bank account by yourself – it needs to be opened in conjunction with a parent or guardian.
This can be done with a variety of accounts, like a joint account or custodial account. Each of them has the same thing in common, an adult cosines with the minor. This eliminates the risk for the bank of liabilities, and allows them to have accounts for minors.
It is important to know the differences between joint and custodial accounts. The joint account allows the minor to use the account, in conjunction with the adult. However the minor is not protected, and the adult or the minor can withdraw money at any time. If you open a joint account, be sure to do so with somebody that you trust such as a parent. Custodial accounts protect the child because as soon as money is deposited into the account the minor owns it (this is known as an irrevocable). However, you cannot use this account on your own, and you will not be able to withdraw or have a debit card in many cases. The adult is in charge of the account until you become 18.
Usually, custodial accounts are for savings, and joint accounts are for checkings.
Accounts for people under the age of 18 are not uncommon, most big banks have them, and they are easy to set up. They are usually advertised as “bank accounts for kids”. However, this gives you the task of sorting through all the different types of accounts and finding the best one for you.
I’ll make this research easy for you – through all of my research, the Capital One Money account for teens is the best option until you turn 18. It allows you to deposit checks, and have a fee-free debit card. It also gives the minor his/her own portal and app to view the balance and account, and access to about 40,000 ATMs. Most other accounts don’t do this.
However, as with most things, there are trade-offs. You cannot withdraw money, or move money to your investment account by yourself. You need the adult, who manages the account to do this for you. In addition, there are no e-checks and you do not receive a physical checkbook. Even though it is a checking account, you cannot write checks. But, from what I’ve seen this is the best account, and gives the minor the most control out of all the banking accounts marketed towards the under 18 group of consumers.
Here’s how you open it:
Navigate to the landing page of the MONEY account: Landing Page
Click open an account. You will be lead to a page where you input personal info. You and the adult will need your social security number and other various information such as your tax statuses and addresses.
You then fund the bank account if you choose to, and after a few more steps, you now own a bank account. It takes well under 30 minuites of both you and the adult know the nessacary information. You can log into a portal online where you can manage your money, and Capital One has two other mobile apps to manage your bank account and debit card.
Your debit card (in your name) comes within a week in the mail. Here are some more FAQ’s if you’re interested: Capital One Money Teen Checking FAQ’s.
I have personally used this account for about a year now, and it does everything that is advertised to do. it’s great for depositing checks, and holding a small balance to use on a debit card. I’ve never held a large balance in this account because I usually move most of my money to my investment account.
I will have a full review of this checking acount posted on this blog in a few days. Also, I wasn’t at all paid by Capital One to write about their account, I’ve used it for quite a while, and it works well for me.