This is a question most parents have. Technically, you can open a bank account in your child’s name when he reaches the minimum age required by the bank of your choice. So, it’s best to check with your local banks to find out what this age is. (Where we are, that’s 14 and free of charges.)
It’s never too early to set up a bank account for your child. In fact, a lot of parents open a separate account where they deposit the money their child receives, earns. So when is the right time for kids to have their own ATM Card (Automated Teller Machine card/debit card) ? It’s not a particular age that you are looking for. It’s the level of your child’s financial maturity. As a parent, you can gauge how your kid fare in the area of spending. Here are some points on how to prepare them about money matters, how debit cards will help them, and other key things to consider.
Educate Them On Money
As you give your child some financial education, you can start letting him decide what to do with his money. This should initially be done with your guidance. You will certainly know when he can manage his own money. In the meantime, you can retain control of your child’s bank account while “consulting” with him about everything you do to it.
Teaching them “needs versus wants” is a good way to make them see the value of money. What would become of the item bought after 6 months? Would he still be using it? Would there be any other things worth spending for?
Their debit card connected to a bank account can also serve as a savings account. It’s a way for them to have a feel of laying aside money for the future. Two of my kids have their own cards now, which proved convenient especially now that shops/stores prefer contactless payment in connection with Covid-19. They can easily access their accounts through mobile banking, which I also monitor from time to time. My kids are able to save up their commission fees, monetary gifts, and some of the allowance we give them monthly, they somehow learn how to value money properly.
The convenience of an ATM card cannot be discounted. You don’t even have to give him cash anymore because he can use his card to make purchases at various establishments. It’s most useful when you are not with him, and he suddenly has to spend on something (like a taxi ride home because of some inconvenience).
What you should be cautious of, however, is what he uses his ATM card for. But as mentioned above, teaching them to prioritize needs over wants is a good start.
Trust Your Child
Don’t make too much fuss about an ATM card or a debit card. Focus on teaching your child to make wise purchase decisions. When you succeed in doing this, you can be sure that he will not easily be tempted into spending his money on frivolities he does not need. But don’t be too strict with them, let them buy a gift for themselves, once in a while. Then, you can be confident that your child will keep his ATM card and use it responsibly.
Until you are sure that he can be trusted to handle his money wisely, you should not give your child his own ATM/debit card. As a compromise, perhaps you can open an account in his name, but keep the ATM card with you unless he needs it. During the times he uses his ATM card, you should be there with him to guide him through the process and maybe even to make sure that he is not withdrawing more than he should.
Most banks allow their users to limit on spending. This means there would be a certain threshold when withdrawing or using money won’t be allowed. This is just a safety net, as kids could be impulsive and might buy something out of the need to be in trend. Talk to your child about limits, and why it’s important to have restraint when it comes to money.
Right Time for Kids Having Their Own ATM Card
Different folks, different strokes – and that goes with parenthood too, and kids’ individuality. What works for one, may not work for the other, or what may work for one on a particular timeline may be far different from someone else’s.
Remember, kids having their own ATM Card, or debit card is not a matter of just age, but their maturity regarding money matters. No matter how rich you are, educating kids about money and saving up is beneficial.
May Palacpac says
My. kids have passbook accounts because their bank doesn’t allow them to have ATMs yet until they’re 18. So weird, but it’s okay cause we can always help them withdraw their funds when they need to. They usually just deposit their talent fees/earnings into their accounts and Mutual funds.
Janella Herrera says
My younger brothers had their first passbook when they were 10 and 13, it’s very useful in times of emergency. I had mine at 16 and I lost it. I have a bank account now, though. 🙂
Kurt Everfresh says
There is a both good and bad sides of it. Good is, when time comes that your kids need money for their expenses (Tuition..,etc..) They have something to get. Bad side is. They will never exert some effort to save for themselves for their future. They will become more dependent on you.
Ivan Jose says
On the technical side of things, banks would allow kids to open ATM card savings accounts at a certain age (I think 18). As such, we should also be careful to give kids ATM cards at a much younger age. That’s because it might not be within the bank’s terms and conditions if something adverse happens to the ATM card or the deposit account itself and it’s a minor handling it. So, personally, I’d be more comfortable giving my kids ATM cards when they are 18.
Ivan Jose says
On the technical side of things, banks would only allow kids to open ATM card savings accounts at a certain age (I think 18). As such, we should also be careful to give kids ATM cards at a much younger age. That’s because it might not be within the bank’s terms and conditions if something adverse happens to the ATM card or the deposit account itself and it’s a minor handling it. So, personally, I’d be more comfortable giving my kids ATM cards when they are 18.
Marie Gizelle says
Yes, that’s why I wrote “where we are, the age requirement is 14,” and to “check with the local bank.”
Veeyah Penero says
I definitely agree! While I don’t have a kid, I have a brother I’ve been encouraging to open a bank account. Not only will it give him a sense of maturity (and the confirmation that our parents trust him), but the call for responsibility comes up as well. He’ll be better-equipped to deal with money as he grows older too.
i dont remember when i had my own atm pero i had my bank accounts one in metrobank and happy savers club before. hahaha ewan ko ano nangyari hahaha.. with my son naman ginawan ko sya agad ng account pero i think nagastos din namin nun kinailangan namin financially. pero before the lockdown nagawan ko sya uli ng bago niyang account. di na lang nadepositan kasi wala naman syang pumasok na cash since wala sya nakitang kamaganak or wala naging work nyahahaha. pero ang gusto ko sa kanya, he is now 8, marunong mag save to buy something, kada ibigay na coins nasa alkansya niya ganun. im not sure lang when we will give him atm since wala pa naman need.
I agree children have atm for savings account, we should teach our children to save money.
I’m planning to open savings account for my daughter too and we are thinking of giving it to her on her 20th birthday or when she finished college. Reason behind is we want her to use that money to what she think will be benificial to her when she start face the real life.
I think this is a good idea so at a young age, they’ll learn how to manage their money. I had my first atm when i was already working lol. How’s my savings? Poor lol
Here in Korea, at age of 18, they are allowed to have an ATM but that’s actually a cash card that they can use to withdraw money from ATM. They are not allowed to have a debit card or credit card unless they have a job. But parents can open a saving account (without ATM) under the child’s name.