The Best Bank Account for Teens: Check Out These 4 Top-Rated Banks

When your kid becomes a teen, it’s the perfect time to start teaching them all about how money works, so they gain financial literacy early on. This includes allowing them to take on small jobs for a little income or do chores to make some cash for spending or saving.

But they’ll need a place to put their money. This is where a bank account — checking or savings account — comes into play. With a checking or savings account, your teen can understand how the banking system works, how to budget their income and, most importantly, how to save.

You want to ensure they start on the right foot, so finding the best bank account for teens is a critical step in the process. Below, we highlight some checking and savings accounts for teens and why they are the best.

Considerations when searching for the best bank account for teens

When you search for a new bank account as an adult, you should carefully explore your options and compare the pros and cons of each one. The same rings true when searching for the best bank account for teens.

Best bank account for teens: Checking

A checking account gives a teen the most freedom with their money. They’ll receive a debit card allowing them to purchase freely at stores and other establishments that accept debit cards. They may also receive a checkbook, though check use is becoming rare today, especially among the youngest generations.

Before helping your teen sign up for a new checking account, you’ll want to pick the best one for them. This includes low fees, easy access to funds, great parental control tools and more. Here are a couple of the best checking accounts for teens.

Capital One MONEY Teen Checking

Capital One offers a robust checking account option for teens called MONEY Teen Checking, but it’s for more than just teens. You can open an account for any child ages eight and up. This allows you to teach even young kids how money works.

The Capital One MONEY Teen Checking account has no account fees, overdraft fees or minimum balance requirements, making it a great option for kids’ limited cash flow. It also includes a free debit card that works at over 70,000 fee-free ATMs nationwide. However, if you go outside the ATM network, you may incur a charge from the ATM you use, and Capital One will not reimburse you for this charge.

Keeping up with the younger generation, the MONEY Teen Checking account comes with a mobile app for easy account access and review. And the app has joint uses for parents and teens. The app allows teens to manage their money just like their parents, whether determining if they have enough cash for a purchase, sending money via Zelle or saving for their first car. 

An added bonus is this account does earn interest — the annual percentage yield (APY) is 0.10%, as of October 2022.

Parents can connect their accounts to their teen’s and easily transfer their allowance or cash as a gift. They can also monitor their teen’s spending to ensure they’re doing so wisely and use their spending as teachable moments. If needed, parents can also lock and unlock their kid’s card. So, parents are in control if the child misplaces the card or is simply overusing it.

This account has no minimum opening deposit, and it limits kids to $500 in daily transactions. For kids 12 and under, a parent or guardian must be a joint owner. For kids 12 to 18 years old, anyone over 18 can be the joint account owner.

Chase High School Checking

Chase High School Checking is a full-featured checking account available to kids ages 13 to 17, and gives them the full experience of managing a bank account and budget. There are no recurring monthly service fees for having this account or overdraft fees, and ATM access is free at over 16,000 Chase ATMs. However, if you make an ATM withdrawal outside the network, you’re subject to fees from the ATM network and Chase.

Unlike Chase’s other child offering, Chase First Banking, Chase High School Checking allows for direct deposit. This means your child can have their paycheck automatically deposited into the account when they get their first job. They can also send money to friends and family via Zelle.

Chase High School Checking includes mobile banking and online banking to view account activity and account balance. You can also set up account notifications and send them to your device. With the Autosave feature, teens can automate their savings for their first car or another larger-ticket item they want to buy.

Another convenient feature of this account is the financial institution will automatically convert it to a Chase Total Checking account once the teen turns 18.

While the Chase High School Checking account offers many great features, there are some downsides. First, the co-owner of this account must be a parent or legal guardian who is also a Chase checking account holder. Second, you cannot open an account online. You must go into a branch to open it in person. Finally, as mentioned earlier, Chase will charge out-of-network ATM fees without reimbursement.

Best bank account for teens: Savings

While a checking account is great for teaching teens about spending cash and money management, a savings account is also beneficial. This account can help teach them personal finance skills, such as saving for larger purchases and retirement and the value of compound interest.

Some teen checking accounts also offer interest, but the APY is so low it’ll almost go unnoticed. With a high-interest-rate savings account, teens can better visualize potential growth and push harder to reach their savings goals and other financial goals.

Here are a couple of the top savings accounts for teens.

Bethpage Federal Credit Union Youth Savings Custodial

Bethpage Federal Credit Union offers strong savings options for kids 17 years old and younger — all the way down to a newborn. Called the Youth Savings Custodial, the funds within the account are the sole ownership of the minor, but the adult has full account control.

You may be alarmed to find that this credit union only has branches in New York, but that shouldn’t deter you from taking advantage of its benefits. Bethpage Federal Credit Union doesn’t require you to live locally to be an account holder. Plus, it has over 30,000 fee-free ATMs nationwide and 5,000 shared co-op branches you can use to make in-person transactions. The minimum opening deposit is $5.

As for the benefits, they are plentiful. You get an NCUA-insured account for up to $250,000 — NCUA is the equivalent of FDIC insurance for credit unions. Also, there’s a 3% APY on the first $1,000 balance (a sliding scale of 0.61% to 3% applies on all other balances over $1,000). Accounts must maintain a $5 minimum daily balance to qualify for APY earnings.  

Once your teen turns 18, you can transfer the account to them.

The downsides to this account are small but worth considering. First, opening and managing the account may be troublesome if you live outside New York. Second, Bethpage Federal Credit Union doesn’t mention mobile banking and other modern parental control features. Finally, the APY is relatively low on higher balances.

Ally Bank Custodial Savings Account

Ally Bank is a bit of a dark horse, as it doesn’t market itself directly as one of the best bank accounts for teens. In fact, it makes little mention of teens in any of its materials. However, if you sign up for its Online Savings account, you can make it a custodial account, meaning the teen owns the money, but the parent or guardian manages the account.

When you sign up for this account, you get access to the Ally mobile banking app, which includes a full account overview, the ability to make transfers between accounts, Zelle, mobile check deposit and much more. But the best part is Ally’s APY is sky high, as it sits at 2.25% as of October 2022. That’s 10 times the national APY average of 0.17%. And there is no sliding scale on that rate — you get it no matter your balance.

There are also no monthly maintenance fees, no minimum deposit for opening, buckets to allocate different savings goals and many other benefits that can help your teen save.

Find the best bank account for teens based on your needs and wants

When it comes to financial literacy, teaching kids while they’re young is ideal. And the best bank accounts for teens can go a long way in helping them.

With a teen checking account, they can master how to budget their allowance money or income from a part-time job and understand how to avoid overspending or impulse buying. And with a teen savings account, they will learn the value of saving — thanks to compound interest — as they strive to build a large-enough balance to buy their first car or other large purchase.

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