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Is online banking possible with your child’s account? Then the offspring can learn how to use it at an early stage. © Christin Klose/dpa-tmn
Whether for shopping or traveling: card payments are also practical for children and young people. There are checking accounts specifically for minors. Parents should not shy away from the offers.
Frankfurt/Bremen – It starts with cash and the piggy bank: This is how smaller children in particular learn to deal with money. But cash is becoming less important and people are increasingly pulling out their cards at the checkout. In order for children and young people to learn how to use it, they need their own checking account. There are offers that are only aimed at minors. We answer the most important questions on the topic.
When does an account for a child make sense?
Children can do more with a checking account than with a pure savings account. For example, paying with the card at the checkout or transferring money if friends have advanced them a few euros for cinema tickets. When the first checking account should be opened depends primarily on the child and whether he or she is mature enough for it, says Thomas Mai, financial expert at the Bremen Consumer Center.
“Parents should above all see whether their children can calculate and handle money.” From the age of ten or twelve onwards, he advises them to think about it. The Federal Association of Banks also recommends a starting age of twelve.
On school trips, it can be helpful if school children can pay by card or even have a prepaid credit card abroad, which some providers also issue. At the latest when young people have their first holiday jobs where their wages are transferred or they start training, a current account is necessary.
Are there special checking accounts for children?
In principle, children can only open an account from the age of seven – with their parents’ consent. Only from this age onwards do they have limited legal capacity. But not all banks accept such young children as customers. Some financial institutions require a minimum age, around twelve years. Others, especially direct banks without their own branches, only accept adult customers, Stiftung Warentest found in a 2023 study.
Overview thanks to the account app: With some children’s accounts, children and parents can view the sales online. © Christin Klose/dpa-tmn
But there are also many banks that are luring their customers of tomorrow with special conditions. That’s why checking accounts aimed at children and young people are often free. Not just the account management itself, but also the Girocard or even a prepaid credit card. Children and young people can use this to pay abroad. Sometimes there is even interest on balances on the accounts, which is no longer common for adults. At least one or even two percent is sometimes possible, says Mai.
Can children get into debt with a checking account?
The most important difference from an adult account is that there is no credit limit. “Children are not allowed to go into debt. That’s why there is no overdraft facility for these checking accounts,” says Mai. Children could therefore only spend what is actually in the account.
Many parents still want to keep an eye on expenses, especially with younger children. Many banks offer to set certain maximum withdrawal amounts per week or month. If you want more control, you can go to providers that offer accounts and cards specifically for children. Parents can often control expenses there using an app.
How should you choose an account?
The easiest way for parents is to simply open their children’s checking account at their house bank. However, this is not always the best option, for example if it does not have any branches. “It is often exciting for children to go to the bank. That’s why it makes sense for it to have a branch locally,” says Claudia Müller. She is the founder of the Female Finance Forum and has written a book about how parents teach their children financial knowledge.
Important – not just for withdrawing money: There should be enough ATMs at your place of residence and in the surrounding area that are easy for the child to reach. Branches are also important, especially for deposits. “If the grandparents prefer to give a note for their birthday rather than transfer it to the grandchild’s account, the child can then put the money into their account themselves,” says Müller.
Not only is the Girocard included in many children’s accounts, a prepaid credit card for abroad is also sometimes provided. © Christin Klose/dpa-tmn
Deposits should ideally be free, as should withdrawals, transfers or cards. Especially with the small sums of money that children and young people move, such costs would otherwise be unnecessarily significant. Online banking should also be possible for young people.
How do you open a checking account for children?
Children cannot open an account on their own. You need parental consent for this. They must identify themselves and sign the application to open an account. If the parents are separated, one parent is enough. As a rule, this person must then provide confirmation of custody.
The child must also prove their identity – either with an ID card or a birth certificate. The bank also wants to know the child’s tax identification number. Because the account – and therefore the money in it – belongs to him.
This means that the child benefits from their own savings allowance of 1,000 euros. Taxes are therefore only due when the income exceeds this limit. However, the bank does not automatically take the allowance into account. Parents should therefore set up a so-called exemption order with their children. This is often easily possible via online banking. Otherwise, the bank advisor will help.
How do children learn how to use the account?
“Parents should explain to their children what the checking account is used for. “A savings account is good for long-term savings, but the checking account is used for payments and transfers,” advises Mai. And then parents should also change. Instead of paying out your pocket money in cash, you should transfer it in the future using a standing order. “It is also important that children know how to react if their card is lost. “So, for example, you should know the blocked numbers of the banks,” says Mai.
