Sandra MacGregor
One of the first steps on a child’s path to becoming a savvy money manager is often opening their first bank account. Here’s what parents and guardians need to know about how youth bank accounts work, how they differ from adult accounts and how to help a child open one.
» MORE: How to open a bank account
What is a kids bank account?
A kids bank account is a special account — typically for those 12 years old or younger — offered by some financial institutions across Canada.
Kids bank accounts are usually savings accounts, but they can also be hybrid accounts that offer chequing features as well. Bank accounts for children are often fee-free, though they may limit monthly transactions and offer low interest rates.
The main purpose of a kids bank account is to help children learn about money and how banking works. Kids can get experience with how interest works or track the full life cycle of a bank transaction, for example.
In Canada, bank accounts for kids are designed to meet a child’s banking needs only until they’re eligible for a student bank account or an adult account — usually when they reach the age of majority in their province or territory. Some banks may even make the switch automatically or start charging a monthly fee once the child reaches a certain age, such as the CIBC Youth account.
» MORE: Common types of bank accounts in Canada
How does a kid-focused bank account work?
A bank account for children may allow the account holder to withdraw money, make deposits, write cheques, allow pre-authorized payments, and even send money via e-transfers, often at no charge (though some accounts limit the number of free transactions).
Usually there are no minimum deposit or monthly maintenance fees for a child’s bank account, and they may also earn interest at a nominal rate.
Accounts for kids may also come with debit cards so children can practice making debit transactions, as well as depositing and withdrawing cash at ATMs.
Some banks also offer access to a mobile app kids can use to monitor their accounts and transfer money. Of course, it’s up to parents and guardians to decide how if they’re comfortable allowing children to use mobile banking apps.
» See our picks: Canada’s best high-interest savings accounts
Types of kids bank accounts
Many financial institutions make it clear that an account is designed for children, usually by the way it’s named or marketed. Kids bank accounts in Canada tend to be savings accounts or hybrid savings-chequing accounts. In some cases, it may be a joint account between a child and one or more adults. When in doubt, simply contact the bank to inquire as to whether kids bank accounts are available, and what features they offer.
While a Registered Education Savings Plan (RESP) is an account designed to eventually benefit a child, it’s not a kids bank account. Instead, an RESP is a special savings account that enables a child’s parents, grandparents or other loved ones to save for the child’s post-secondary education. The money in an RESP earns interest tax-free and is also eligible for grants from the government.
» MORE: How to boost RESP savings with the Canadian Education Savings Grant
How to open a kids bank account
Often the only requirement for a kids bank account is age: typically 12 years old or younger, but in some cases, kids up to 18 years old may be eligible.
To open a kids bank account at a brick-and-mortar bank, a parent and child will likely need to visit a branch together. Parents and children should bring identification like a birth certificate or passport, as well as proof of their address, like a utility bill.
Online-only banks often require the parent or guardian to have their own account, and may require the adult to speak with a representative over the phone in lieu of a branch visit.
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