Account Options for Youth Under 18

Account Options for Youth Under 18

Are you looking to teach your teenager about money management? A great way to do so is to help them open their own savings or checking account that allows them to learn important skills like saving, tracking their balances, and managing a debit card.

Our accounts are a great way to help your child learn about being financially responsible before they head off to college, the military, or the workforce.

Explore Our Account Options for Youth

PSECU offers two savings account options for youth under age 18 – regular savings and custodial accounts. Both qualify for a higher-yield savings rate, which is available on accounts opened for, or owned by, youth under age 18. A balance as low as $5 can earn a 1.50% Annual Percentage Yield (APY) on up to $500. If your balance goes above $500, any money over $500 will earn dividends based on our Regular Savings share rate. Likewise, when the youth turns age 18, the rate will change to the current Regular Savings share rate.

  • Regular Account: Youth age 12 and over can open a regular account. An adult can serve as joint owner of the regular account until the child reaches age 18. Both the youth and joint owners are eligible for PSECU debit cards in their own names.
  • Custodial Account: Youth must meet PSECU membership eligibility requirements to get a custodial account, but the custodian doesn’t need to be eligible to join. For a custodial account, only the custodian can withdraw money from the account. Custodial accounts can remain open until the youth turns 21; however, the higher-yield savings rate will expire once the youth turns 18.

Both of these account options are savings shares that require a minimum $5 share balance. Once an account is opened, a checking share that comes with free checks and a debit card can be added. The checking share does not qualify for the higher-yield dividend rate.

If you opt to have your child open a regular account, a parent can be added as a joint owner so you can monitor your child’s spending and help guide them as they work toward financial independence.

Why Should Your Teenager Have a Checking Account?

Think of a joint or custodial checking account as a bank account with training wheels. It allows youth to develop and put into practice the money skills they’ll need to navigate adulthood later in life. It also gives teens an opportunity to manage their money with the financial guidance of an adult – youth can speak with a parent or custodian about their financial decisions and learn how to handle responsibilities such as balancing a checkbook and checking a balance. These are essential building blocks to becoming a fiscally fit adult.

Differences Between Regular and Custodial Accounts for Kids 12-18

While neither account charges monthly maintenance fees for the savings account or the associated checking accounts, there are some important differences to be aware of between regular and custodial accounts. Here are just a few:

  • Both the youth member and the joint owner of a regular account are eligible for debit card access. With a custodial account, only the custodian is issued a debit card. The custodian must conduct all transactions on the account.
  • Only the custodian can access custodial accounts through digital banking. Regular youth accounts for youth 12 and older allow them to have their own online access. Both provide the opportunity to teach kids the valuable skill of monitoring their account, but the regular account allows the youth to have direct access.

Open a Checking Account at PSECU

If eligible for membership, a youth age 12 and older can apply to open a regular account at PSECU in just a few minutes and then choose to add on checking. When they open an account with us, they can continue to learn smart money habits as they age and also enjoy the many benefits that come with credit union membership.

For more tips on money management, visit our WalletWorks page.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal or other professional if you have questions.