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One of the largest reasons that so many people struggle with their finances and end up in large amounts of debt is because of the lack of education when it comes to financial literacy skills.
By starting a savings account early, you are able to take control of their money and learn how to appropriately manage it. With that in mind though, there are plenty of different children and youth bank accounts to choose from. Let's take a look at some of the best bank accounts for kids, and how to go about starting one.
Why Get Your Child A Bank Account
While opening a children's account isn't exactly always the first thing on our minds, it's an important way for your child to learn about saving money. It's also a lot more convenient since cash isn't as prominent as it used to be. So many purchases are done online, or through pre order, so your child having access to their own money with their own account, visa debit card, or pre paid credit card can bridge the gap between using your cards and having cash.
Since banking is mostly done online these days, it's beneficial for children to get the feel of how online banking works before they need to start making bill payments. A lot of children's bank accounts allow them to use online banking as well as the app to use their account and transfer money. They can check their balances and be held accountable for how much they spend.
How to Open a Children's Bank Account
How to open an account for a child really just depends on their age. For younger children you usually only need a birth certificate as proof of identity. If the child is a bit older than you may also need a secondary form of identification as well as the child's Social Insurance Number (SIN).
Every bank is going to be different. It all depends on where you choose to open the account. The best way to start the process is to speak to an advisor to ensure that you are opening the account properly and have the proper documentation and access.
The Age A Child Can Have an Account and a Debit Card
If you want to open a bank account for your child, there is no minimum age requirement. You can open the account at any time that you choose. In order for a child to open an account without parental permission though, they do need to be at least 12 years old and be able to provide the proper ID. You can also get a debit card for your child's bank account at any time, no matter their age.
What to Look for in an Account
When you are choosing the right account for your child, it's important to consider what the kids bank account offers.
- What are the monthly or annual fees?
- Can you make transactions?
- Is there a monthly transaction limit?
- Does it come with a debit card?
- Do you earn interest on the funds?
- Is the account free and, if so, when does it stop being free?
These are important things to consider because when your child becomes older, this is likely the account they will stick with. Ideally you want to choose an account with no fees and allows your child to earn interest on the funds that they have in the account.
Recommended Age to Open the Account
When it comes to opening a bank account for your child, it will be hard to determine at what age this should happen. Many parents choose to wait until their child has a job before they open an account for them, but you actually don't need to wait that long.
Your child can start saving money in a savings account at any time, but the recommended age to set up children's savings accounts is 9. You can always start it earlier, but at 9 years old they can start to learn how money works, the concept of money and keep track of how much is in their account. That said, the recommended age for opening a chequing account is 15 years old.
Best Savings Accounts for Children
There are plenty of Canadian bank accounts specifically meant for children and youth. Because of this, they often offer competitive packages. This works in your benefit and offers plenty of different ways for you to help your child create strong financial health and achieve their financial goals. Here are some of the best accounts currently available.
CIBC Smart Start
CIBC offers a smart account for youth and students. This account also allows you to engage in no fee banking up until the age of 25.
For parents of children under 13, you can set up recurring transfers into your child's account and gain access to the joint account with just a tap. For those ages 13 to 24, you can make all of your transactions right from your phones, get student discounts and have unlimited no fee banking.
Some key features included for all with this account is:
- No monthly fees
- Unlimited e-transfers
- Unlimited transactions
- On free ATM withdrawal from a non-CIBC ATM
It also comes with a visa debit card for online purchases. All you need in order to qualify is to be a Canadian resident under 25 and have a valid piece of government ID. For children under 13, they will need a parent to open an account. There is also the CIBC premium growth account where youth can save their money while earning interest.
HSBC Youth Savings Account
The HSBC Youth Savings Account offers some great perks to youth looking to establish a bank account while earning interest on the money that they save. This account includes:
- No transaction fees
- Unlimited withdrawals
- Unlimited debits
- Rebates for non-HSBC surcharges
- Daily interest that is paid out monthly
- Free e-transfers
- Free mobile cheque deposits
- Free ATM withdrawals
To get this account though, you do have to meet the eligibility criteria of being a Canadian resident and 19 years of age or younger. For premier youth, the age is 30. HSBC's intent with this account is to teach youth the power of compound interest while creating good saving habits.
Tangerine Children's Savings Account
While the Tangerine Children's Savings Account is a joint account between a parent and child, the child gets their own bank account client number and login. This allows them to login and track their spending. Having the ability to do this allows children to be accountable for their finances.
Also included in the account is :
- No monthly fees
- No minimum balance requirements
- 1.10% interest
In order to open a kids savings account with Tangerine, you must be a client yourself. You can sing up online or via phone, since this bank doesn't have any physical branches
TD Student Chequing Account
The TD Student Chequing Account offers some great options for students who use their accounts for everything. There are no monthly fees, unlimited free transactions and you can earn interest on your savings. They even offer no fees for any overdraft protection.
While this account is mainly geared towards students, it's also recommended for children and youth. This is because the account can stay open until they are 23. Even after that the account doesn't have to be closed, the fees will just change.
Another perk to getting a TD account is that they have VISA debit cards. This means that you can use your account in order to make purchases online, instead of a credit card.
RBC Leo's Young Savers Account
The Leo account is a great way to get your child started with a bank account. It's meant for children aged 0-12 years old. It includes:
- Free unlimited transactions
- Free e-transfers
- No minimum account balance requirement
- Automatic transfers for allowance payments
- No monthly fees
There are also other features that you can add for a small fee.
For youth and students 13 and up, there is the RBC Advantage Banking for Students. It includes:
- Unlimited debit transactions
- Free e-transfers
- No ATM fees
- Rebate on annual credit card fees of up to $48
- A specific student app
- Virtual visa debit card
- Mobile payment options
- 1 free book of 50 personalized cheques
- 1 yearly NSF rebate
Scotiabank Getting There Savings Account
The Getting There Savings Program was built to help youth build healthy financial habits. It includes unlimited transactions and the opportunity to earn rewards as you make debit transactions. Tha said though, this is a chequing account so it's not ideal for those who want to earn interest on savings. It's meant to be just like a regular chequing account. What it includes is:
- No monthly fees
- Unlimited debit transactions
- Unlimited e-transfers
- Scene program
- 0.05% interest on deposits under $500
- 0.10% interest on deposits $500 or more
In order to qualify though, you must be 18 years of age or younger.
BMO Plus Chequing Account
WIth BMO, you can get a bank account for your child or your teen. For children 13 plus, the account is called the Plus Plan chequing account. It includes:
- No monthly fees
- Interac e-transfers
- $2.00 charge for each non BMO ATM withdrawal
If the child is under 13 then you can open a kids account which also has no monthly fees. In order to do this though, you need to go in person to a branch and apply. This includes the plus plan at no monthly fee. Once the child turns 13, they will then upgrade to the teen account which is very similar.
Canadian Western Bank Youth Account
Another great children's bank account in Canada is the Canadian Western Bank Youth Account. It was specifically built for children under the age of 18 to learn how to save their money. It includes:
- Competitive interest rates
- No monthly fees
- Unlimited transactions
- Free interac e-transfers
The only fee is a $1.50 charge for ATM withdrawals on non-EXCHANGE network ATMs. The interest that you earn on your balance is based on the amount. Amounts $500 and under earns 0.05% interest. Amounts over $500 earn 0.50% interest.
National Bank Youth Account
National Bank offers one youth bank account. It's called The Connected Package. It includes:
- Mobile cheque deposits
- Unlimited transactions
- Free transfers
- Real time updates with the app and online banking
The best part of this account is that there are no bank account fees at all. In order to register a child under 14 years old for this account, you will have to go into a branch. Youth ages 14 -24 can register for the account online or in person, without parental permission. Just before your 25th birthday, the bank will be in touch with you to help you find the best banking package for you to transition into.
Laurentian Bank Youth Account
The Laurentian Bank offers specific financial services for students. While it's not for children, it's great for youth ages 16-25 years of age and there are two different bank accounts that you can choose from.
The preferred account consists of 20 monthly transactions including:
- WIthdrawals, transfers and bill payments at ATMs
- Transfers and bill payments
- Interac direct payments
- Cheques
- Pre authorized payments
You also get free e-statements and access to the EXCHANGE network ATMs. The monthly fee is $0.
The unlimited account consists of the same things except, you are allowed unlimited transactions instead of just 20 per month. The cost of this account is $5.75 per month.
MyDoh
You may have heard of MyDoh before, but what exactly is it? Well, it's an app and smart cash card that teaches children and teens how to manage their money. It includes a variety of features that make it different from a children's bank account and more like a money management app. The features with this card include:
- Tasks and Allowance- this allows children to get paid once they have completed their chores
- Smart Cash Card - this is a prepaid cards that kids can spend their money with
- Savings Goals - this allows kids to structure their savings with a specific target date
- PayDay - thai features allows kids to get paid only on saturdays and make their money last a week
- Oversight- this allows parents to keep track and react to their child's spending
- Add a Parent - you can now add a parent to the account for free
The cost of MyDoh is only $2.99 per month. The MyDoh smart cash card is issued by the Royal Bank of Canada and powered via VISA.
Alterna Bank Youth Start Package
If you are looking for one of the best free kids bank accounts, then look no further. Alterna Bank has a youth start package specifically designed to teach children about interest rates, saving money and how to properly use a bank account.
With this Alterna Bank account you have no monthly fees, 30 free transactions per month (including e-transfers) and you can get monthly , annual or quarterly statements. Another perk is that it's available to all children under 18 years of age. That said though, Alterna Bank only has in person branches in Ontario. Most of their banking can be done online though.
Other Financial Institutions and What They Offer
If you look at the financial institutions above, you notice those are just a portion of those that we have in Canada. They are just the best kids' bank accounts. These are banks that offer specific accounts for students and youth, not all others. Why do you ask? Well many financial institutions have accounts for everyone with no fees, so there is no need to have special accounts for everyone. Let's take a look at some of the banks that some we missed and see what they offer.
Simplii Financial
While Simplii financial doesn't have an account for kids, all of their accounts have no fees. That said, they do have a student account, though. Basically, this account includes:
- No fee daily banking
- Free unlimited Interac e-transfers
- Access to all CIBC ATMs for free
- Banking with with mobile app
What makes it different from other Simplii accounts is the student banking offer. If you apply for an account and can meet the student qualifications then you can earn up to $400 back. You must set up a direct deposit of at least $100 for 3 months in order to qualify. Offer ends June 30, 2023. Also, no matter when you finish school, you get to keep the no monthly fee, no minimum balance account.
Manulife Financial
While Manulife offers a great bank account, they don't have anything specific for youth and children. They only offer one type of account.
Vancity
Vancity is a credit union that does offer youth accounts. They are available to those under 25 years of age and include:
- Free everyday unlimited transactions
- Free mobile deposit
- Free withdrawals at over 4,000 ATMs
- Free personalized cheques (50)
- Apple pay, tap payment and mobile banking
With this Vancity account there are no transaction fees. You do however have to pay for Interac e-transfers. They are free to receive but they cost $0.90 to send.
Meridian
Meridian is another credit union that offers a youth account. This account is for those 17 and under. It includes:
- Unlimited free transactions
- Free access to over 43,000 ATMs
- No monthly fees
- Interest earned on every dollar
With this Meridian account you can send Interac e-transfers, but there is an extra charge.
Citibank
Citibank offers the Junior Account. This account includes multi currency deposits, fund transfer services and is for children 18 and under.
EQ Bank
EQ Bank is another one that doesn't offer specific accounts for kids. However, they do have a few different accounts that have no monthly fees.
Motus Bank
Motus bankalso has no specific accounts for kids. They do have high interest savings accountsand no fee chequing accounts though.
Other Ways to Teach Your Child About Money
Opening your child a bank account is a great way to teach your child about financial health, but there are plenty of other ways you can add to their financial education as well. The most common way is an allowance. As a child completes their chores, they receive payment. This is a great way to teach your child about how money is earned. Once they have earned the money though, what happens.
Whether your child has a piggy bank or a bank account, having some place to store their money is the first step. They should have a way to save their money without having the temptation to spend it all of the time. Another great way to teach them money management is to have a “PayDay”. This means that they receive payment on an allotted day of the week or month. They then have to have this money last them until the next “PayDay”. This way, whether they spend or save, it's all they have until their next payment.
If your child does decide to spend their money, it's important to teach them to be wise with it. Comparing prices is a starting point. Looking for sales in order to save as much of their money as they can is also a great lesson. Learning how to stretch a dollar and make informed decisions are great life skills.
Lastly, a great way to teach your child the value of money, is to involve them in the budgeting process. Sometimes, until something is broken down on paper, it isn't as obvious to us on how it really breaks down. Visualizing is the key to understanding for many people.
Why Financial Literacy is Important for Children and Teens
Opening a bank account for your child is important in their financial literacy journey, but why do they need to learn financial literacy? Well, there are quite a few different reasons. First, it helps them to understand what money is and how to use it. Being able to appropriate funds is key when you start to become more financially independent.
Financial literacy is also an important part of avoiding debt. If you don't fully understand debt, how it works and how to get out of it, you can easily find yourself in trouble. Understanding these concepts before you venture out onto your own can make a huge difference to your financial future.
Understanding finances also helps youth understand and spot scammers. Not only does this save their finances, it helps them to be careful with sensitive information. That isn't always just financial information either. It;s an important life skill.
Ways You Can Save for Your Child's Future
Teaching your child to be in control of their own finances is great, but if you are wanting to help them save for further education or other large expenses, then having a savings account for them is a great idea. Many people open term accounts and other types of accounts that their children can't access until a certain age is met or until they meet the access requirements. That said, though, let's take a look at some of the ways you can save for their future.
RESPs
An RESP, also known as a Registered Education Savings Plan, is an account that is meant to save money for your child's education. The reason people choose to put the money into RESPs though, is because it's tax free and you get contributions added from the government. With RESPs though, you are limited to a lifetime total of $50,000 per child and they can be used for:
- Apprenticeship programs
- Trade schools
- Universities
- Colleges
- CEGEPs ( general or vocational college in quebec)
Tax Free Savings Accounts
TFSAs are pretty simple. If you are looking to save some money for your kids, then this could be an option for you. Basically, you can put as little or as much money as you'd like into a TFSA and it will continue to grow, tax free. Also, you can withdraw money from a TFSA for whatever you like. The only restriction that there is with a TFSA is your yearly contribution limit.
Set up a Trust
Essentially how a trust works, is that money will be transferred from one part to another once certain specific terms have been met. The reason some parents do this is so they can ensure that the money is being used for what they intended. This method is usually used for large sums, but really, it can be for any amount that you choose.
Get Life Insurance
This method is used when people purchase whole life insurance. This means that once they have been paying into it for a certain period of time, they are able to tap into the cash value of the policy. That said, it can be a more expensive option.
Others have a life insurance policy with their children as the beneficiary. That means, if anything happens to them, their children receive the amount they allotted for within the policy. You can't control when this policy is received, but it's a great way to protect your children in the future.
Conclusion
Setting your child up with a bank account is easier than you may think. There are plenty to choose from, that said, we just listed some of the best kids bank accounts in Canada. However, which account you choose may depend on which financial institution you use for your banking and the age of the child.
Some accounts are more geared to those who are under 12 and need parental permission in order to get an account. These accounts are usually meant for saving and helping children put their money away in a safe place. Others are meant for teenagers and young adults to help them get started with their banking while saving as much money as they can.
No matter which account type you choose, you can't go wrong setting up your child with one. It teaches them how to properly manage and keep track of their finances. If you are wanting to save money for their future, then there are plenty of different accounts that you can open for them in order to save up large sums.
