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Teenage years are that awkward phase when a youngster is desperate not to be thought of as a child, but perhaps is not quite ready for the full responsibilities of adulthood.
And that is as true of money as it is of everything else. So, as a parent, what’s the answer?
Teen bank accounts can act as a bridge between pocket money spending and the kind of financial know-how that is required for when kids fly the nest and begin their adult lives.
Here, we dig into the specifics surrounding teen debit cards and accounts, how they compare to student accounts, and how to open a bank account for a teenager.
What is a teen bank account?
There are two main forms of current account that could be classed as a teen bank account: those offered to under-18s in general, and those specifically designed for 16- and 17-year-olds.
Under-18s accounts
These are most commonly labelled by banks as children’s current accounts, and can be opened from when your child is 11 years old.
Yet don’t let the name fool you – they offer most, if not all, of the same features as a full adult bank account. Some typical features might include::
- debit cards (that can be used in store, online and at cash machines)
- the ability to set up direct debits and standing orders
- interest paid on any savings
- an online login and dedicated mobile banking app
What they don’t have, importantly, is an overdraft facility. And if the bank cannot stop a payment that will take your teen’s balance below zero, the bank should not charge them any fees or interest.
Similarly, your teen will not be able to apply for a credit card from this account.
16-17 accounts
Some banks may not provide kids’ accounts but instead offer teen bank accounts for those aged 16 and 17. These are sometimes known as a young person’s account.
They have the same features as children’s current accounts mentioned above, including a teen debit card and lack of an overdraft facility.
Some accounts may also prevent your teen from spending on activities that are illegal for under-18s, such as gambling and viewing adult content.
Although they do not differ much from under-18s accounts, moving your child from a children’s account to a more specifically labelled teen bank account could be part of their journey in building trust around money.
How to open a bank account for a teenager
The process for applying for a bank account for a teenager depends on how old the teen in question is.
If they are between the ages of 13 and 15, then they will need a parent or legal guardian in order to apply for a teen bank account. This could be online, but may need to be in branch if the parent or guardian doesn’t have a current account with the chosen provider.
Teens aged 16 and 17 can apply for a bank account on their own, again either online or in branch. And, of course, anyone aged 18-plus is free to apply for either a student account or a basic current account.
When applying for the account, you will need to make sure you have the following documents to hand:
- proof of identification (for both parent/guardian and child if aged 13 to 15)
- proof of address
- proof of a place on an undergraduate university course if applying for a student account
Teen bank accounts vs student bank accounts
Of course, those later teenage years see many youngsters transition from school and college to university. And with that opens up the question of student bank accounts.
If a teen bank account is typically an adult account with a couple of features stripped out, then a student account puts those features back in – but with some of the sharp edges sanded down.
For example, teen bank accounts do not offer overdrafts. One of the main selling points of student accounts, on the other hand, is that they usually come with an interest-free overdraft, as long as the account holder remains within their arranged limit. Be aware, however, that student account overdrafts are only interest-free for a fixed period of time.
If your teen is still within their overdraft limit once they have graduated, they may then be switched to a graduate account.
Similarly, while you cannot get credit with a teen bank account, some providers may offer a student credit card alongside their student bank account.
Although you must have a confirmed place on a full-time undergraduate course to open a student bank account, the age limit varies from provider to provider. Some providers will accept applicants aged 17.
If your teen is 18 and over and is not going to university, then they will need to apply for a standard current account.
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