Checking and Savings 101 for Kids

Whether it’s a piggy bank, a jar, or money stuffed under the mattress, parents want to teach their kids to save money early on. Not only is it important to teach children about saving and using money wisely, but it also helps create a sense of responsibility in children to learn how to save and conserve.

According to, kids under age 6 rarely require anything more than a piggy bank to keep their cash. But once the tooth fairy comes calling, chores start to produce an allowance, or the old lemonade stand pays off, it’s time to open an account to allow that money to grow. Here are some tips to keep in mind when turning the piggy bank into a bank account.

Know the necessities. Credit unions typically offer better interest rates than banks, so a credit union is a good place to start. Either way, almost any bank or credit union has a plan already in place to help kids save.

URW Credit Union’s Zach Potojecki says, “It’s important to open a bank account so that parents can “enforce the need for financial independence at a young age.”

URW’s Kidz Club Share Account is designed for children under age 13. The youth savings account earns interest on the first $500 and can be opened with a $25 deposit. The account allows the child to make withdrawals without a parent or joint owner present, which “gives the minor the control and experience of maintaining his or her own account,” according to URW’s website. However, a parent must have joint ownership until a child turns 18.

In addition, URW offers a VUTMA account, which does not allow the child access to the funds until they reach age 18 or 21.

Make an appointment. Most child accounts require the same information to open as adult accounts, but it’s still a good idea to schedule an appointment and bring the needed documentation to open a new account.

“We do recommend opening an account with the child in person, for various reasons,” Potojecki said. “The most important are to help them understand how the credit union works, and how we are here to help them.”

Although URW’s Kidz Club accounts can be managed online, teaching a child the best practices when using online tools to manage a bank account is crucial toward protecting this or her money and teaching internet safety.

Decide what and when to deposit and withdraw. Holiday gift checks, birthday money, or cash from the proverbial lemonade stand all should be readily deposited into a child’s account. Savings accounts such as URW’s Kidz Club have ATM debit cards available, but it’s a good idea to teach a child responsible use of those tools, both in terms of using a card to make purchases and cash withdrawals. Also, be sure to point out the reality of ATM fees. It may also be necessary for parents of older kids to practice oversight.

“I believe children should have access to their debit card,” Potojecki said. “While they have access to the debit card/ATM card, it should be the parents’ responsibility to oversee their account and to teach them money management.”

Make a budget. Especially if a child gets a regular allowance or income, it’s important to teach them how to decide what they can spend and what they can save. Even when using a savings account, making a budget is important.

“You have to give your child the power to decide how much to save and how much to spend,” according to Investopedia. “By giving your child this power, you will also confer the responsibility and excitement that comes with making adult decisions. You can make suggestions and prepare some example plans, but the final choice should be left to your child.”

Check on checking. Most children have no need for checking accounts until at least age 13, as a parent can write a check for them and most purchases can be made using an ATM or debit card. Still, Potojecki says student checking accounts are important because “a child in their adolescent years will benefit greatly from learning how to manage their own money,” and not just by saving it.

No matter where you go or how you do it, opening a bank account for your child can be one of the most crucial lessons a parent can give. Planning and using a dedicated place for your kid’s money to go can make a world of difference in their adult years.

Banking is one of the earliest business relationships one can have and opening a joint account with a child is one way to teach the value of money and doing business all at once.

“We want the kids to feel like they belong and encourage them save money,” Potojecki said.