Bank accounts for teens and children

Kids’ accounts are a great way for children and teens to learn how to manage money without getting carried away with their spending. Get help choosing the right account with our handy guide.

Kids’ accounts are a great way for children and teens to learn how to manage money without getting carried away with their spending. Get help choosing the right account with our handy guide.

Anelda Knoesen
From the Money team
4
minute read
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Posted 26 FEBRUARY 2020

Bank accounts for teens and children 

Once a child turns 11, they can open their own current account. Also known as youth bank accounts, children’s current accounts are a great place to receive allowances, birthday money – and – when the child gets older – money from employers. Here’s how they work.

Who is eligible for a children’s current account?

Children between the age of 11 and 17 should be able to open a children’s bank account, although there are some available for under-19s.
 
Under-16s will usually have to be accompanied by a parent or guardian to open an account, but 16 to 18-year-olds may be able to open an account themselves online, depending on the provider.

How do children’s current accounts work?

Once opened, a children’s account works much like an adult current account. Children can use them to make  bank transfers and set up direct debits and standing orders.
 
However, it’s good to know that kids’ accounts won’t include an overdraft (it’s illegal to offer a credit agreement, which includes an overdraft, to someone aged under 18), so your child won’t be able to spend more than they have.
 
Plus, you’ll usually need to give permission for your child to have a debit card if they’re under 16, giving you even more control.
 
Most kids’ bank accounts offer either:

  • a debit card, which can be used to buy online and in stores, and to withdraw cash at ATMs
  • a cash card, which can be used to withdraw money from ATMs

Some children’s current accounts can also be used with payment apps, like Google Pay and Apple Pay.

How do teens bank accounts work?

A teen bank account is very similar to a child account. One of the main differences is that, from 16, they’ll be able to open an account by themselves. If they’re under 16, they’ll need a parent or guardian with them to open an account.

Just like a children’s account, a teen bank account doesn’t offer an overdraft until they’re 18. An overdraft is a form of credit agreement, which is illegal for under 18s.

If they’re 16 or older, they’ll be able to register for a debit card without a parent or guardian’s permission, which lets them buy things online and in shops without the need for cash, although they can also use it to withdraw cash from an ATM.

Plus, you’ll usually need to give permission for your child to have a debit card if they’re under 16, giving you even more control.

Do teen bank accounts come with online banking? 

Yes, a teen bank account will allow you to use online banking or mobile banking apps. If you’re 16 or older, you’ll be able to use these to send money to friends and family, as well as pay for services online.

With online banking, you’ll also be able to take advantages of mobile banking features such as Apple Pay and Google Pay. These allow you to make payments simply with a tap of your phone.

What should I look for in a youth current account?

  • Withdrawal limits: accounts with daily spending caps limit the amount that can be withdrawn in a day.
  • Account opening amount: some kids’ bank accounts can be opened with as little as £1.
  • No monthly fees: most youth accounts won’t have a monthly charge, but check before applying.
  • Interest on accounts: some youth bank accounts will offer interest, although it’s likely you’ll get more with a children’s savings account.
  • Account tracking: some accounts offer mobile apps and text alerts to help kids keep track of their money.
  • Online, mobile and telephone banking: for ease of access and the ability to see where their money is going.

What do I need to take with me when opening a children’s bank account?

You’ll need to provide a few details, such as current address and contact information. You’ll also need to take proof of identity for both you and your child in the form of a passport, driving licence or birth certificate, along with proof of address. For under 16s, the registered address will need to be the same as the parent or guardian.

How do I manage a children's bank account?

You might be pleased to know that children’s bank accounts don’t come with an overdraft, which means they can’t get themselves into any debt. However, you may still want to help them manage their money.

If your child is under 16, the bank will ask you for permission to issue them with a debit card. If you’re uncomfortable with them being able to freely spend money like that, you could instead restrict them to a cash card, limiting their ability to spend. This is particularly useful for preventing them spending unnecessarily online.

What happens to a children’s current account when the child turns 18?

Child or teen bank accounts usually become an adult current account automatically, but this is something to check with the provider.

What if my child is under 11?

Children can operate their own savings accounts from the age of seven. Another alternative is a prepaid card, which some providers offer from the age of six. Money is loaded onto the card, which is then used in the same way as a debit card. 

How does tax work on children’s banks accounts?

In most cases, children won’t pay tax on money they earn or accrue in interest. There’s a starting rate for savings of £5,000, plus the Personal Savings Allowance of £1,000 and the Personal Earnings Allowance (in the 2019/20 tax year this was £12,500). Your child won’t be liable for tax unless they exceed these.
 
If a child receives more than £100 in interest from money given by a parent or family member, the parent or family member will have to pay tax at their own rate if the interest puts them over their own Personal Savings Allowance.

How do I find the best account for my child or teen?

Compare the Market doesn’t currently compare bank accounts for teens or children, but if you have a teenager preparing for university, you can find everything you need to know about student accounts.

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