Opening a bank account as a minor can be a pivotal step toward developing financial literacy, responsibility, and good money management habits. For kids and teens who are earning money from their first jobs or saving birthday money, having a bank account not only provides a safe place to deposit funds but also introduces essential concepts such as budgeting and financial planning. However, since individuals under 18 are typically classified as minors, they cannot open a bank account independently. Instead, they must have an adult—usually a parent or guardian—co-sign the account, resulting in a joint account where both parties maintain control and have responsibilities associated with the account.
In most U.S. states, minors are permitted to open bank accounts, but there are specific regulations regarding how these accounts are structured. Federal law does not explicitly prohibit minors from opening accounts; however, individual states usually stipulate that minors need an adult’s involvement. The age of majority—which varies by state—plays a significant role in determining when a minor can manage their financial matters on their own. For instance, while the majority of states set this age at 18, Alabama, Nebraska, and Mississippi have it set at 19 and 21, respectively. This means that in these states, minors may need to be older than 18 to independently open a bank account.
When seeking to open a bank account as a minor, there are primarily two account types to consider: savings accounts and checking accounts. Minor savings accounts often cater to children and teens, providing features such as odds of earning interest on their balance, albeit generally accompanied by withdrawal limits and limited access to ATMs. These accounts are ideal for individuals looking to save money for future goals rather than immediate spending. On the other hand, minor checking accounts are available at many banks starting from the age of 13, offering more flexibility and accessibility. These accounts come with debit cards for convenient access to funds, allowing for daily transactions and also potentially providing educational tools for budgeting and spending, plus added parental controls for monitoring.
To open a bank account under the age of 18, individuals need to follow specific procedures alongside their assisting adult. First, they must determine which type of account—checking or savings—best suits their financial needs. Subsequently, they should research financial institutions that offer suitable accounts and are amenable to underage applicants. It’s advisable to look for banks that have low or no fees and minimum balance requirements. Next, both the minor and the adult must gather necessary personal information such as Social Security numbers, identification, and proof of address. After this paperwork is in order, they can apply either online or in person, depending on the bank’s regulations. It’s essential to be aware that some accounts require an initial deposit, which can often be provided through cash, checks, or transfers.
Despite the general rule that minors require a parent to open a bank account, specific circumstances permit some flexibility. For instance, certain banks offer special teen accounts, like Capital One’s MONEY Teen Checking account, which issues debit cards to users as young as eight, provided an adult co-signs. However, it is crucial to distinguish between joint accounts—shared by a minor and an adult—and custodial accounts, which are primarily managed by an adult for the benefit of the minor. The latter restricts the minor’s control over the account until they reach the age of majority, further highlighting the importance of understanding account structures before opening one.
Once a minor turns 18, the transition of their bank account can vary depending on the financial institution’s policies. Some banks automatically convert minor accounts into regular or student accounts, while others may require action by the individual or their parent/guardian to maintain or modify account functionality. If a minor wishes to have sole control over their account, they can either discuss removing the parent’s name from the joint account or open a new account solely in their name, following the bank’s prescribed guidelines. In summation, opening a bank account as a minor offers numerous benefits and paves the way for heightened financial autonomy and insight crucial for adulthood.
