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Teach Your Teen How to Use Their First Checking Account

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A first checking account is a rite of passage. Many children have savings accounts opened in their names when they are born, but as your child gets older and develops, he or she will need a checking account to gain experience managing their money. As said by the character Benjamin Parker in Spider-Man, “With great power comes great responsibility.” A checking account can be a great responsibility, so it’s important that your teen knows how they work.



For any new account, make sure it is the right fit for your teen, find out there are any monthly maintenance fees or minimum balance requirements, and if the account receives interest.

Involve your teen in the process, beginning with some online research. Any answers you don’t find online, you or your teen can ask at the financial institution (FI). When conducting account research, explain to your teen what interest is and how it is earned in an account.

Interest is a percentage an FI will pay the account holder on the money they keep in their savings account. FIs pay interest to encourage deposits. The money you deposit doesn’t just sit in the vault while it’s there. The FI uses it for other purposes, often investing it or lending it to others. This allows them to earn interest on your money, which they can then pass down to the account holder in the form of interest.

To meet federal compliance requirements, FIs need to disclose their rates to customers so they can compare the rates of multiple FIs. You will receive a rate sheet at account opening, with rates and other fees the FI charges for their services.



Your teen’s first debit card will give them easier access to their money. Knowing how the card works along with managing it is an important skill to learn. Many teens think they already know how to use a debit card, but miss out on how one works.

Depending on what type of checking account you open, there may be the possibility of overdrafting the account. Overdrafting means that your teen spent more money than was in the account, and now owes the FI money.



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One way to prevent this from happening is setting up overdraft from savings. With overdraft from savings, the next time a purchase is made when there isn’t enough money, funds will automatically transfer from savings to checking to cover the item.

The best way to prevent overdrafts is to teach your teen how to balance their checkbook. This can be done with a transaction register, but also through online banking and mobile apps. Growing up using technology, teens may gravitate towards using a mobile app to keep track of their account. Apps allow you to use your phone to check account balances, transfer money between accounts, or keep track of purchase activity.



Automatic teller machines (ATMs) run on various card networks. Some will be within the same network as your teen’s FI and some will not. If your card is used at an out-of-network ATM, your teen will have to pay a fee to use the ATM.

To avoid extra fees, figure out which ATMs are in-network for your teen’s FI. On many FI websites there are ATM locators listing addresses for branches with ATMs and in-network ATMs at non-branch locations.

Cash back at the point of sale is another fee-free way for your teen to get cash from their account. Certain stores, such as drug or grocery stores offer the option to get cash back with a purchase.



You may have felt it was time to open a checking account because your teen has money to deposit. This could be allowance, birthday money, or income from a first job. Regardless of the source of income, without guidance, your teen may not be able to manage the account. This is an opportunity to teach them how to budget.

One way to start the conversation is to discuss wants versus needs. A want is something that is optional, meaning you could go on existing without the item. This could be as small as renting a video from Redbox, or larger like buying the latest iPhone. A need is essential to your survival; for instance, you may need a new winter coat if your old one isn’t usable anymore.

When your teen starts using their debit card, help them figure out if a purchase is a want or a need. It’s OK to buy something that is a want, but you may want to budget for that purchase. Suggest that they place a portion of each deposit into a savings account, rather than checking. They can then use their savings as a rainy-day fund or to save up for an item they want. They can use the money in their checking account to pay for bills, if they have any, or for gas, their share of a cell phone bill, or hot lunch in the school cafeteria.



In today’s rapidly evolving technological landscape, understanding how to use digital banking platforms and mobile apps is crucial. These tools can provide your teen with a more convenient and efficient way to manage their account.

Digital banking platforms and mobile apps allow for real-time monitoring of account balances, which can help your teen stay on top of their spending. Additionally, these platforms often provide alerts that can notify your teen of low balances or unusual activity, providing an extra layer of security.

Mobile banking apps often have features that allow for tracking of spending patterns, which can help your teen understand where their money is going and identify areas where they can save. Emphasize the importance of regularly checking their account through these digital tools to keep track of their financial activity.



It’s important for your teen to understand how overdraft protection works. While it can be a helpful tool to prevent declined transactions, it’s not a free service. When an account is overdrawn, the financial institution may cover the transaction but will usually charge an overdraft fee.

Teach your teen to monitor their account balance closely to avoid overdrafts. If they do opt for overdraft protection, make sure they understand the fees associated with it and the importance of repaying any overdrafts promptly to avoid additional fees.



With the increasing use of digital banking, it’s crucial for your teen to understand the importance of online security and privacy. Teach them to use strong, unique passwords for their online banking accounts and to change them regularly.

Explain the dangers of sharing sensitive information online or over the phone. They should never give out their banking information unless they’re sure they’re communicating with their bank.

Personally, if I have access to the account, I would instruct my child to transfer the call to me whenever someone requests sensitive information. Additionally, I would advise my teenager to consult with me before taking any actions that they are uncertain about. It is crucial for them to understand the risks involved in sharing personal information online or over the phone, and they should only disclose their banking details if they are absolutely certain that they are communicating with their bank.

Finally, talk about common scams, such as phishing attempts, where fraudsters try to trick people into giving out their personal information. Emphasize the importance of verifying the source of any requests for their banking information.

By addressing these topics, your teen will be well-prepared to manage their checking account responsibly and securely.



Your teen’s first checking account will aid in their journey to financial independence. There are many things to consider when using a checking account, so help your teen along by helping them make decisions. Until a teen reaches age 18, a parent or guardian will need to be on the account to help monitor and guide them. By explaining how to manage the account, you’ll be able to set your teen up for future success in properly using a checking account.

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Caroline Cross - Bio

About Caroline Cross

Caroline Cross is the branch lead at VSECU's Williston branch. Her daily interactions with members can range from opening accounts to closing consumer loans. Caroline lives in Williston with her husband and two children.
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