Kids Bank Account: How Does it Work?

Opening a kids bank account is one of the first steps on a child’s path to becoming a savvy money manager. If it’s your child’s first bank account, as parents or guardians, you’ll need to know how youth bank accounts work, how they differ from adult accounts and how to help open one.

What is a kids bank account?

A kids bank account is a special account — typically for those 12 years old or younger, but sometimes up to age 19 or 25 — offered by some financial institutions across Canada. The CIBC Youth account, for example, offers account holders no monthly fee until they are 25.

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 or graduates from post-secondary school.

How a bank account for kids works

Bank accounts for children typically allow account holders to withdraw money, make deposits, write cheques, allow pre-authorized payments and even send money via e-transfers, often at no charge. These accounts may also come with debit cards so children can practice making debit transactions, as well as depositing and withdrawing cash at ATMs.

However, some kids’ accounts limit the number of free transactions. Usually there are no minimum deposit or monthly maintenance fees for these bank accounts, and they may also earn interest at a nominal rate.

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 if they’re comfortable allowing children to use mobile banking apps.

» See our picks: Canada’s best savings accounts

Types of kids bank accounts

Many financial institutions make a clear distinction that an account is designed for children, usually by the way it’s named or marketed. When in doubt, simply contact the bank to inquire whether kids bank accounts are available, and what features they offer. However, the types of bank accounts available for kids include:

In some cases, a kids account may be a joint account between a child and one or more adults. When in doubt, simply contact the bank to inquire whether kids bank accounts are available, and what features they offer.

Note that a Registered Education Savings Plan (RESP) is an account designed to eventually benefit a child, but it’s not a bank account for kids. 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.

Investments in an RESP will grow tax-free, and may even qualify for government contributions like the Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB).

How to open a bank account for kids

Often the only requirement for a kids bank account is age: typically 12 years or under. However, in some cases, kids up to 18, 23, or 25 years of age may be eligible to open a youth account.

To open a bank account for kids 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 account with the bank, and may require the adult to speak with a representative over the phone in lieu of a branch visit.