Yahoo Finance 6 banking options for kids and teens
“My 14-year-old wants his own debit card. Just for everyday spending and to store pocket money. It’d be handy to have some control ... do you have any recommendations?”
That’s a question we hear quite a bit at Yahoo Finance.
There are a few things to think about with kids' banking options.
Many bank accounts for kids need a parental guardian or you can be a joint account holder with your child. It’s worth noting there are some tax rules depending on your kid's age and the amount of interest earned.
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Finding the right account for your kid can be a little confusing, so Yahoo Finance spoke to personal finance expert at Finder, and mum of two, Kate Browne about forming kids' savings habits.
“It’s never been more important to start talking to your children about money and the importance of saving,” Browne said.
“Financial literacy is often something we aren’t taught about until we finish school or, in some cases, not at all.”
Here's a look at some of the card and account options available:
1. Current
Current is a neobank with a Teen option that works through a paid app and debit card.
You can instant transfer to your teen’s account, set them chores to complete within the app and have the option to set spending limits and even block some merchants.
You also have parental controls to monitor their spending.
Cost: $36 per teen per year.
2. Commbank Smart Access Account for Youth
An account for kids under 14.
Kids aged 9 and older can get their own debit card and pair it with a Youthsaver account for that rainy-day pocket money.
Parents can use their own CommBank app to keep an eye on spending and can set up weekly spending limits.
Cost: $0 monthly fees.
3. CUA Youth eSaver
Kids 9 and older can apply for Youth Banking at CUA, which, in 2020, had the highest savings rate of a non-bank.
The myChequing youth account can be linked to the Youth eSaver to get your kids started.
CUA also has a YouTube series that teaches kids about money.
4. ING Orange Everyday Youth
Teens 15-17 are eligible for this account.
It offers the same perks as the standard ING Everyday account: no fees, full rebate on ATM fees and rebate on international transaction fees.
There’s even a bonus $0.50c when you withdraw $200 cash.
Cost: $0 monthly fees.
5. Spriggy
Spriggy is a paid mobile app that links to a prepaid debit card for kids aged 6-17.
The cards come in some kid-friendly designs (hello Wonder Woman) and work pretty much anywhere Visa is accepted.
Parents can keep an eye on their spending through the Parent app and you can even set up chores and pay pocket money.
You can also set up custom savings goals within the app to teach good money habits early on.
Cost: $30 per year per kid.
6. Westpac Choice
Westpac offers a ‘Handycard’ for kids under 14.
It lets them simulate a debit card with some extra parental restrictions in place (you have to be 13 to use Apple Pay).
Anyone over 14 can apply for a debit card and there are bonus interest rates for growing a balance.
Cost: $0 monthly fees.
Browne’s top banking tips for kids
The first thing to do is talk to your kids about money, Browne said:
Have conversations with your kids about spending, budgeting and saving as early as possible.
Show them when you are paying bills or doing your banking so they can see it's an important part of daily life.
Set up a debit card for your child (when you feel they are ready) to help them learn about money in real time.
If they are earning pocket money or being paid for babysitting or pet minding, that money can go straight into their accounts.
Look for kids' debit cards with spending controls, spending-tracking tools and the choice of how your child can use their card, so you have total visibility on how they are spending.
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