Parents Guide to Opening Your Child’s First Bank Account

It’s never too early to teach your children about the importance of money management and to begin establishing their financial education. In fact, studies indicate that children who have a bank account by age 7 are more likely to develop strong financial habits that will serve them well throughout their lives.

HFS FCU is committed to serving the banking needs of today and of future generations, and programs such as the Kids Club and the school Deposit Day Program help underscore our commitment to holistic financial offerings and education.

When Should You Open a Bank Account for Your Child?

When’s the right time to open a banking account for your child? Most experts suggest opening a savings account for your child between the ages of 5 and 7, as this is when kids first begin to understand the concept and importance of money.

Aside from age, some of the key developmental milestones that indicate your child is likely ready for an account include:

• They’re counting money
• They begin to understand the concepts of savings versus spending
• They show an interest in making purchases

While a savings account is a great starting point for young children, experts suggest opening a checking account for teens to continue their financial education and take on greater financial responsibility as they move toward financial independence.

Signs Your Child is Ready for Their First Debit Card

As your child grows and takes on more responsibility, opening a checking account and assigning them their first debit card is a logical next step. Most teens receive their first debit card between the ages of 13 and 16 as they get their first real job or mature enough to handle the responsibility.

Options include custodial or joint accounts. Custodial accounts are opened for a minor but managed by an adult. Once the child turns 18, they assume control of the account. With a joint account, there’s shared responsibility between the child and the adult.

Choosing the Right Kids Bank Account: Features That Matter

Parents shouldn’t just choose any financial institution to open an account for their child. There are various features that they should be looking for with their kids and teens, including:

• No monthly fees
• Free debit cards
• Parental control features
• Educational tools and resources to build good savings and spending habits

Free Debit Cards for Kids: What Parents Need to Know

When you open a checking account at HFS FCU, you have the option to receive a debit card for your child. These cards come with the option to build in protections for parents, including daily spending limits and merchant restrictions that support smart money management.

Debit cards are often preferred to prepaid ones because they’re tied to a real bank account and help teens learn more about budgeting and responsible spending. Prepaid cards, conversely, are cards with money loaded onto them that’s not tied to a specific account.

Comparing Youth Account Options at HFS FCU

One of the most popular youth banking options for kids is the HFS FCU Kids Club, which involves opening a savings or checking account with a parent as a joint owner. Offering the same features as a standard checking account, youth checking accounts help give children real-life money management experience with parental supervision. Contact HFS FCU or stop into your local branch for more information on these offerings and other benefits available to youth members.

HFS FCU’s Innovative In-School Banking Program

As part of HFS FCU’s commitment to the community, we partner with local schools to host in-school Deposit Days to help make savings a habit for children and families. Currently, we’re working with six local schools: Waiakea Elementary School, Kea’au Elementary School, St. Joseph Elementary School, Keaukaha Elementary School, E.B. DeSilva Elementary School, and Kaumana Elementary School.

Through Deposit Days, kids can get familiar with setting savings goals and learn to spend money wisely.

Benefits of School Banking Programs for Financial Literacy

The sooner you can educate children on financial literacy, the better. Deposit Days help your child establish a consistent savings schedule and learn about other financial concepts, such as compound interest. Couple this with your child saving with other classmates, and it can create a positive peer influence around money management. When consistent, even small deposits can add up over time.

Step-by-Step Guide: How to Open a Bank Account for Your Child

How do you open a bank account for your child? Here’s a step-by-step guide:

1. Gather essential documents: Items we need include your parent or guardian’s ID, your child’s Social Security number, proof of residency, and an initial deposit.
2. You can open an account in person at an HFS FCU branch. Minors under 16 are currently not able to open an account online. The process is streamlined and straightforward, taking minutes.
3. With parental permission, we’ll help set up online banking access for your child and activate any debit card associated with the account.

Setting Up Parental Controls and Monitoring

Even for responsible, trustworthy children, parental supervision is essential. The HFS Cards App allows parents to maintain some control over their teens’ debit cards by monitoring transactions, limiting spending, and setting merchant restrictions. Account activity can also be monitored via online banking.

As your child ages and becomes more responsible, gradually loosening control and empowering them is natural.

Making the First Deposit and Setting Savings Goals

Banking should be a positive thing. We suggest sitting down with your child, setting goals for saving money, and then celebrating when these goals—or other financial milestones—are met.

The initial deposit can be anywhere from $5 to $100 to establish your child’s bank account. Then, we suggest helping your child commit to regular deposits. Appropriate savings goals vary by age but may include toys or video games for younger children and a car or a bike for teens.

Teaching Financial Responsibility with Youth Banking

Teaching your kids financial responsibility varies by age. For instance, while you may discuss the concepts of savings versus spending with young children, budgeting and building credit are more appropriate for teens and young adults.

Think of debit cards as training wheels for future credit cards, as they help instill a “spend only what you have” mindset in children that can translate into responsible credit card use. Your children will make mistakes — and that’s OK. They should make them with small amounts before the consequences pile up.

Age-Appropriate Money Lessons and Activities

Some lessons and activities by age include:

• Young children (5-8): Counting deposits, piggy banks, or savings jars
• Pre-teens (9-12): Comparing prices, setting savings goals, understanding interest
• Teenagers and young adults (13-17): Budgeting, tracking spending, investment basics, building credit

Using Allowance and Chores to Build Money Skills

A good way for your children to build money skills is to earn money by doing chores around your home. They can deposit their earned allowance into their bank account and track it. Consider creating pay scales for different chores around the home, and help your child determine what they’ll need to do to reach various savings goals.

Common Mistakes Parents Make (And How to Avoid Them)

Money mistakes can happen. Some of the common mistakes parents make include:

• Not involving their kids in banking decisions
• Keeping any money matters secret from their children
• Being too restrictive with parental oversight of kids’ debit cards (kids need to make mistakes and learn from the experience)
• Failure to instill age-appropriate financial education

Balancing Freedom with Protection

While parental oversight over your child’s bank account and debit cards is important, try not to be too restrictive. Too many restrictions can hinder learning and not properly empower your child to make financial decisions on their own. We also suggest gradually releasing control of the bank account as your child matures and becomes more responsible.

Start Your Child’s Financial Journey with HFS FCU Today

For more information on the importance of establishing good financial habits early in your child’s life and on HFS FCU’s specific child banking options, contact us today or visit your local branch.

Frequently Asked Questions

What’s the minimum age to open a bank account for kids at HFS FCU?

Anyone can open an account for a child at any age. However, if the child is a minor, a parent or guardian must be added as a joint account holder.

Are there any fees for kids’ debit cards or monthly maintenance charges?

No, HFS FCU doesn’t have monthly maintenance fees.

How do I enroll my child in the in-school deposit program at their elementary school?

It’s easy to enroll in HFS FCU’s Kids Club program. Just fill out a pre-registration form, which can be found on our website, and bring it into any HFS FCU branch. We’ll need some documents to open the account, and then you’ll have to let us know that you also want to participate in the Deposit Day program.

Can my teenager use their debit card for online purchases and apps?

Yes, though we do suggest monitoring their spending and setting appropriate daily limits.

What happens to the account when my child turns 18?

When a child turns 18, a custodial account becomes their personal account, and they gain complete, independent control of it. Contact HFS FCU or stop into your local branch for more information.

How much money should I put in my child’s first bank account?

Though there’s no universal best practice, most people elect to start small. The goal of a child’s first bank account is to teach them about saving, so most people start small and build the account over time.

Can grandparents or other relatives contribute to my child’s account?

Yes. Learn more about how relatives can contribute by contacting HFS FCU, especially if you’re exploring kids’ savings accounts.

What parental controls are available on teen debit cards?

Parents can download the HFS FCU Cards App to set limits, activate alerts, and manage misplaced cards. They can monitor their kids’ spending through online and mobile banking.

How do I teach my child about overdrafts and account balances?

We suggest starting with the basics to help your child make money and banking more relatable. From there, you can move on to real-world situations. Assess bank statements together with your child and discuss your balance, any fees you’ve incurred, and how to avoid them, turning those moments into valuable lessons.

Can my child have both a savings and a checking account?

Yes, your child can have both as long as they’re joint or custodial accounts. Having both types of accounts is an ideal way to teach them about financial management and the value of saving for the future versus spending in the present.

Is there a minimum balance requirement for kids’ bank accounts?

To open a Kids Club savings account, you’ll need at least $5. However, there is no minimum balance to earn dividends.

How can my child check their balance without a smartphone?

Your child can use a shared device to log into HFS FCU’s mobile banking app or use a shared computer to log into online banking.