Kids and Teens: A Guide to Opening and Managing Bank Accounts in Australia

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, updated on January 30th, 2024       

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Teen doing internet banking

Financial education is a vital aspect of a child's development, and one effective way to instil responsible money management habits is through the establishment of bank accounts tailored to their needs. This guide aims to provide parents, guardians, and educators with insights into opening and managing bank accounts for kids and teens in Australia.

Key Takeaways:

  • Early Financial Literacy: Initiating kids with a bank account early fosters financial responsibility and literacy, establishing a robust foundation for their future.
  • Transition to Teen Accounts: Understanding the shift from kids to teen accounts equips parents and teens with the knowledge to manage finances effectively.
  • Educational Engagement: Integrating financial education into daily life enhances learning, ensuring that kids and teens develop a healthy relationship with money.

Opening a Bank Account for Kids

When it comes to introducing children to the world of banking, early exposure lays the groundwork for a lifetime of financial responsibility. Opening a bank account for kids is a straightforward process, typically requiring the following:

Documentation: Parents or guardians usually need to provide identification documents for both them and the child, along with the child's birth certificate. Some banks may also require proof of address.

Types of Accounts: Various banks offer specific accounts designed for kids, commonly known as children's savings accounts. These accounts often come with features such as no or low fees, competitive interest rates, and incentives to encourage regular saving.

Choosing the right bank and account is crucial to ensure it aligns with the family's needs and provides a conducive environment for the child's financial learning journey.

Managing Finances for Teens

As children grow into teenagers, their financial needs and capabilities evolve. Transitioning from kids' accounts to teen accounts is a significant step in their financial education. Key aspects to consider include:

Debit Cards: Many teen accounts come with debit cards, allowing teenagers to make purchases and learn about responsible spending. Parents can set spending limits and monitor transactions.

Online Banking: Introduce teens to the world of online banking, empowering them to manage their accounts independently. This includes checking balances, transferring funds, and setting savings goals.

Budgeting Tools: Some banks offer budgeting tools and apps that teenagers can use to track their spending, set savings targets, and gain insights into their financial habits.

Parents play a crucial role during this transition by guiding teens on responsible card usage, monitoring financial activities, and imparting valuable lessons about budgeting and saving.

Picture of teen thinking about money

Financial Education for Young Minds

Beyond the mechanics of opening and managing bank accounts, the broader goal is to foster financial literacy in children and teens. Parents and educators can contribute significantly to this aspect by:

Leading by Example: Demonstrating responsible financial behaviour and discussing money matters openly creates a positive environment for learning.

Everyday Learning: Incorporate financial education into everyday activities. For instance, involve kids in grocery shopping, discussing the concept of budgeting and making informed choices.

Savings Challenges: Create savings challenges or goals for kids and teens. This hands-on approach helps them understand the value of saving and working towards financial objectives.

Educational engagement is key to ensuring that financial literacy becomes an integral part of a child's upbringing, preparing them for a financially savvy future.

Conclusion

Opening and managing bank accounts for kids and teens is not just a practical step; it's an investment in their financial future. By instilling financial literacy early on, parents and educators empower the younger generation to navigate the complexities of the financial world with confidence and responsibility.

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