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Helping Your Child Choose a Bank
So you child needs a bank. Maybe he is starting his first job, or maybe she is heading off to college. There are lots of choices, so how do you cut through the clutter?
Many banks offer you a premium for signing up. For example, they might put $50 into your new account or they could give teddy bear. That can be very appealing to kids, but you know it isn’t really all that important in the long term. What really matters is how your child intends to use the bank. So start with a few basic questions:
- Where do you want to bank? If your child is heading off to college, a bank in that town can be more convenient. It will be easier to write a check in local stores or to get cash. However, a bank near you is more convenient if you suspect you might be called upon to make an emergency deposit from time to time. A good solution might be a national or regional bank with locations in both places.
- How will you probably use your checking account? If your child is likely to run low of funds on a regular basis, look for an account that has no minimum balance and good overdraft protection. If he can keep a required balance, find a bank that offers an interest-bearing checking account. Many banks waive fees on student checking accounts, so ask.
- How much will you use an ATM? ATM charges can add up quickly, so look for a bank that has a lot of ATMs in locations where your child will be or that waives the service fee for using their ATM card at another bank’s machine.
- Do you want a bank-issued credit card? Most banks offer them, and some offer a very good deal to account-holders. If your child is in the market for a card, check out what potential banks have to offer.
- Do you want to do online banking and bill-paying? This can be very convenient for kids away from home. And, if you have the login information, it can help you keep tabs on her spending.
- Might you need to borrow money? If your child might need a car loan, for example, it could be a good idea to check out the rates available from different banks and credit unions, then choose the one that offers the best deal.
Finally, don’t overlook online banks. They might have more features and lower fees than a brick-and-mortar bank.