Here's How to Tell When Your Kid Is Ready for Their Own Bank Account

Many banks allow you to open a special bank account for children. But, just because you can get an account for your child does not necessarily mean you should do so. Before you sign your son or daughter up for an account of their own, there are a few things to think about. 

Do they meet the bank's minimum age requirements?

Your child's account will typically need to be linked to your own bank account in some way, or managed by you as a custodial account, until they reach the age of 18. But some banks allow you to open separate children's accounts as long as they are tied to yours. 

There could be minimum age requirements, though. So, find out what those are first. If your chosen bank won't give an account to a child under 6 years old, for example, you would need to wait at least that long. 

Are they earning money (even from an allowance)?

A bank account is really only useful if you have money to put into it. If your child has none, there is likely little reason to open a bank account for them. In fact, if you plan to invest money for them that would be used for expenses like a college education, then a 529 plan may be a better option than opening a bank account and putting funds in there. Choosing an investment account allows you to earn a better return if the money won't be used for a long time.

If your child is earning money, though -- even from an allowance -- then it makes sense to help them learn how to put some of it into the bank. Once they begin depositing money into a bank account, they can see how it grows and learn about how to manage financial goals over time. 

Are they interested in managing money?

A bank account can help your child learn to manage money effectively, so they are more likely to save and less likely to go into credit card debt in the future. But they need to be interested in and ready to learn about financial responsibility before you open a bank account for them.

If they have no interest in keeping their money in the bank and keeping tabs on how the funds are growing, there's little use in going to the trouble to open an account for them. In fact, trying to force them to start learning about financial responsibilities before they are ready could end up backfiring if they find money management to be just another frustrating task they're required to complete. 

Do they have financial goals?

Finally, consider whether your child has any financial goals. If they want to work toward something -- even if it's buying an expensive toy or video game system -- then opening a bank account can help them do that. They'll be able to see how socking away money in the bank over time will eventually enable them to be a success at achieving their objectives.

By paying attention to these signs that your child is ready for an account of their own, you can make a smart choice about when to help them get started in the world of consumer banking.