Best Bank for Teens?

[lizzie]

I’m looking for recommendations for a bank for my teen daughters. I apologize if this has already been addressed, but I tried looking around first and didn’t find what I was looking for.

Right now, they each have an account at our credit union. It’s not that convenient for them, though, because the credit union doesn’t have many branches or no-fee ATMs that they can easily get to. So as a practical matter most of their dealings with the bank go through us (i.e., we give them cash and then deduct it from their account.)

I’d like them to be more independent with their money.  I could just get them debit cards from the credit union–and maybe that’s what would make the most sense--but I also thought it might make sense to set them up with a more “national” bank, since they may soon be going out of state for college or (after college) for jobs.

Any recommendations? Ideally it would have no fees (except overdraft I guess), no minimum balance, debit cards, online banking/app, and widely available no-fee ATMs. We live in Minneapolis MN, if that makes any difference.

I googled around and saw that a lot of big banks offer “student” accounts. These looked suspicious to me, though, because they still had monthly service fees, they were just temporarily waived if certain conditions are met (like you’re a student, you’re under 23, or the account is less than 5 years old).* The best option looked like a Capital One 360 account.

Also, I know this has been discussed and some people never use checks, but is it feasible for a young adult to have no checks? We hardly ever use checks, but we still need to use them sometimes.

*Can I just say, having been with my credit union for something like 20 years, I guess I missed when banks became such ripoffs! Monthly service fees, WTF? I guess I’m spoiled/naive.

[johnny847]

Charles Schwab or Ally should fit the bill, so long as they don't need to do cash deposits (and even then, it looks like they could just give you the cash, you deposit it, and credit them back later). They are online only banks with no minimums or fees. There are no ATM fees and reimburse ATM fees incurred at any bank, so any bank ATM is fee free (just tell them not to use those weird free standing ATMs). They also provide free checks and have mobile deposit.

I'm pretty sure a minor can have checks - I'm fairly certain I had checks for my account before I turned 18. Not 100% though.

Monthly service fees, WTF? I guess I’m spoiled/naive.

No, you're not spoiled/naive. You're just not a sucker who pays fees to maintain a bank account.

[GizmoTX]

We NEVER pay monthly bank fees! When DS started HS, I helped him open his first checking account. I wanted him to have checks as well as a debit card, since a payment to an individual can't be done with a debit card, & I wanted him to learn about all common banking functions, including reconciliation.

We started with Wells Fargo, since we already had accounts there & it has many locations near us. WF offered two versions of student checking at the time: debit card for HS students plus checks for its college account. I asked for & got the college version. To get to zero fees, DS had to also open a savings account & set up an auto transfer into it from the checking account every month ($25). Other than the initial deposit of $100, WF had no minimums on either account & the savings could be immediately transferred out at any time, just no more than 4 times/month. Having all our accounts at the same bank meant I could auto transfer a monthly allowance into DS' account, & online access let me monitor it anonymously from time to time. DS has online access but can't see our accounts. At the time, WF provided us with free checks, but that's not the case anymore.

Now most major banks offer mobile deposit, which provides instant depositing without having to go to a physical location. DS now has a checking account with Schwab Bank (and we do too). Although Schwab is online only, it refunds ATM fees anywhere in the world, so you no longer have to find a particular bank's ATM to avoid the withdrawal fee, which is great for travel. It charges zero for banking without the savings account game we had to play with WF, no minimums, & free checks. With the checking account comes a portal into its brokerage accounts -- DS has a Roth IRA there as well as a taxable investment account.

Schwab's money market funds don't pay very much, so DS now has a savings account at Synchrony online paying 1% annually. Funds can be easily transferred online between it & most major banks.



 

[lizzie]

Thanks for the responses! This is very helpful. I'll look into Charles Schwab and Ally.

[zolotiyeruki]

My brother and his wife provide a "bank of Mom and Dad" for their kids.  Rather than giving their kids allowance in cash, they increase their kids' balances in BoM&D.  Then when their kids want to buy something, they take a withdrawl from BoM&D, either by asking M&D to purchase something online for them, or by getting cash from M&D.

They also give their kids 6% interest, to help teach them about that aspect of the financial world.

[johnny847]

My brother and his wife provide a "bank of Mom and Dad" for their kids.  Rather than giving their kids allowance in cash, they increase their kids' balances in BoM&D.  Then when their kids want to buy something, they take a withdrawl from BoM&D, either by asking M&D to purchase something online for them, or by getting cash from M&D.

They also give their kids 6% interest, to help teach them about that aspect of the financial world.

I get the sense that the OP wants to teach her children about managing their own accounts.

[rubybeth]

I think a Capital One 360 account might be good, too. Similar to Ally, it's online-only and I think they can use any ATM and have their fees reimbursed. Check deposits via smart phone.