What Are The Options For Teenager's Bank Accounts?
Banks commonly have a range of attractive offers on checking accounts available for teenagers
, as well as obviously many different savings accounts options. While a checking account will allow them to have access to their money, care should be taken.
Checking Accounts
The majority of checking accounts for teenagers will allow them to have a bank card, checkbook or both. Often parents are given an option to limit spending and large overdraft fees are usually applied to prevent over-spending.
It is advisable to keep reminding teenagers of their spending limits and keep an eye on their balance in order to prevent them from going into debt.
If and when choosing a checking account for teenagers, it is important to carefully compare the terms and conditions of various accounts on offer before making a commitment.
Savings Accounts
By far the safest options are savings accounts for teenagers. Many of the so-called children's accounts can be opened right up the age of 17, so are suitable for teenagers.
The selection here consists of instant access, relatively low rate accounts allowing withdrawals, usually without penalty charges, regular savers or fixed term accounts.
Regular savings accounts require monthly deposits, but usually allow access to funds as and when required. They have reasonably good rates. It should, however, be noted that missing deposits may result in penalties. Some accounts may be terminated if regular deposits are not kept up.
The fixed term accounts offer better rates, especially if taken out for longer periods, but often either do not permit withdrawals at all or will incur penalty fees.
CD Accounts
Many banks offer an opportunity to open Certificate of Deposit accounts for teenagers. They usually also require an adult to be at least partly in control of the account, offer good rates and are available for terms from 6 months upward, with maximum terms usually being 10 years.
The longer terms obviously offer the best rates, but usually require the money to remain locked until the term is complete. Although some types do offer the ability to make withdrawals, they are typically subject to penalty charges.
Custodial Accounts
Custodial accounts can also be opened for teenagers. The money saved here is usually locked until the teenager reaches either maturity or a pre-determined age.
This option typically carries very good rates, because accounts of this type are normally fairly long term and no withdrawals are made.
Making a Choice
Ultimately, it has to be decided what the purpose of the account is going to be. If the account is meant to provide a certain amount of spending power to a teenager, a checking account will suffice. To encourage saving, or save towards educational expenses, a child's savings account, CD or custodial account will serve the purpose far better.
It must be remembered that children's savings accounts in particular have a range of tax benefits and may therefore ultimately provide higher yields.
The best way to find the most suitable account for a teenager to either learn how to manage their money or save is to take a look at the various accounts available and compare their requirements, benefits and so on. Once a few accounts have been examined in more detail, the final choice will be a much more informed one and will lead to greater savings.
by: Michael T. Scott
The Crime Review: A Drop Of The Hard Stuff, By Lawrence Block Past Astrological Planetary Cycles To Learn From 3 Approaches To Getting An Extension On A Deadline Invest In Property For A Visa To The United States The Unique Fauna Of Australia The Basics Of The Hazare Movement The Panama Canal - A True Man Made Wonder Of The World Sauna Benefits The Benefits Of An Infrared Sauna Seeking For The Right Pay-per-click Company Get In Shape With Brazilian Jiu-jitsu Training In Fort Worth Texas Choosing The Best Ecig For Your Needs Do You Need To Find A Lost Person By Their Phone Number?