Helping your child set up their first bank account

Helping your child set up their first bank account

A step-by-step guide to introducing your child to banking.

Getting a bank account for the first time is a big money moment. For early primary school kids, it’ll probably be the first time they have a formal way to save beyond that of a piggy bank. For parents, it means setting up their account and explaining what it does. 

I’ve always thought of this process as a great opportunity to introduce early primary school-aged kids to banking. Although it’s unrealistic to expect them to set up their own bank account, there’s no reason why you can’t get them involved and teach them some valuable lessons from the get-go.

Step 1 – Introduce the concept of banking to your child

By the time your child is old enough to attend school, you can begin explaining what banks are and how they work. It can be a tricky process but it’s important for children to understand why they need an account before they start using it themselves. One way to explain this is to tell them that a bank account is like a big piggy bank that will mind their money until they’re ready to use it. As they get older you can build on that knowledge and explain things like interest, personal lending, and savings plans.

Step 2 – Discuss what they will use their bank account for

This is where you can explain to your child how they will use their bank account. Use your own examples to explain to them that you get paid for going to work and that money is paid into your own bank account, which you then use to pay for things like food and bills. Let them know that they’ll eventually get money, which they can put into their account, and over time this will accumulate with rewards for savings efforts.

Step 3 – Setting up an Account in-branch or online

Any children who are under 14-years-old will need a parent or adult to help them set up their account either online, or in person at a branch. Make sure you have your child’s birth certificate and a residential address handy. See if you can involve your children in the process to give them ownership over their account and a more holistic understanding of the banking experience.

Step 4 – Help them kickstart their savings

There are plenty of ways to make saving fun for your primary school-aged children, but it’s up to you to help facilitate their efforts. Help them develop a basic savings plan and go with them to the bank when they want to physically deposit pocket money so they feel confident about their savings. Also, if your child’s primary school is involved in our School Banking program, they can get involved using their new Youthsaver Account.

Step 5 – Give them responsibility over their account

Ultimately you’re the gatekeeper to your child’s account, so it’s up to you to help them when it comes to saving. Make sure they’re regularly saving money and depositing it into their account. There may be points in time when they want to withdraw money, so use these as an opportunity to reinforce responsible spending lessons. It’s all about encouraging independence and responsibility so your kids develop healthy habits that they’ll carry with them into adulthood.

Visit The Beanstalk for more tips and tricks on teaching your kids about money.