Teens & Taxes: How To Help Your Teen Choose and Set Up a Bank Account During Tax Season
The Internal Revenue Service (IRS) is urging all taxpayers to set up direct deposit for their tax return in order to receive their money faster. The IRS will not permit taxpayers to deposit a tax refund into someone else’s account, however — so if your teen doesn’t have a bank account, now is a good time to teach them this aspect of personal finance.
Based on our research for the GOBankingRates Best Banks of 2022 report, we discovered that most banks do permit children ages 13 and up to open a bank account. This would be a joint, or custodial, account that is also opened in at least one parent’s name. Once the child turns 18, the account could become theirs exclusively.
Teen-Specific Bank Accounts
Many banks offer special accounts designed to make banking easier for kids and teens.
GOBankingRates’ top-rated bank for 2022, JPMorgan Chase Bank, offers a free checking account for students aged 13 to 17 — as long as it is linked to a parent’s Chase checking account. Teens must visit a Chase branch to open the account.
Similarly, CapitalOne bank offers its MONEY checking account (with no fee for teens or tweens ages 8 and up). Kids can earn interest on their checking account balance, gain access to a free debit card and — best of all — parents can link any external checking account to their child’s MONEY account, and don’t have to be an existing CapitalOne customer.
When you’re choosing a checking account to suit your teen, you want to make sure to find one that offers:
- No fee banking.
- Free debit card.
- No minimum balance to maintain.
- Direct deposit.
- Easy-to-use, intuitive banking app.
Other features you might look for may include an interest-earning checking account, like the aforementioned CapitalOne MONEY account. Depending on the age of your child and the amount of control you want to give them over their finances, you may elect to open an account which alerts parents as to any transactions. You might also look for the capability to separate money into different “pockets” within the account, each fund to be used for different expenses.
The Chase First bank account for children enables parents to deposit money into the account and allocate it for different purposes. In other words, you can set a budget for your child for school lunch, gas money, or even money to be used at specific stores.
What About Zelle?
You might also want to choose a bank that is in the Zelle network for fee-free person-to-person payments. This empowers your child to split the bill if they grab pizza with friends and not have to worry about using a separate app — like Venmo or PayPal — or about accidentally being taxed on transactions.
For many parents, it’s a no-brainer to set their teen up with a bank account at the bank they do business with themselves. But if you’re currently shopping around for a new bank — or your bank doesn’t offer a teen-friendly account — take a look at the possibilities out there.
Sit down with your teen, evaluate the top bank accounts for their age group, and let them make the choice alongside your guidance.
To open the account, your teen might need their Social Security card, address, and date of birth. They should be prepared to set up online access with an email address, username, and a chosen password. Urge your teen to create a PIN for debit card access, one that is easy for them to remember but hard for anyone to guess.
Beyond making it easier to receive their tax refund, opening a bank account is a smart financial step for a teen who is starting to learn how to manage money.
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