It is a sound idea to teach children from an early age how to save. Parents may help kids by providing a piggy bank that makes it fun to save money. However, a more excellent idea is to open a bank account for your child. This bank account is far more realistic than a piggy bank and helps prepare your child for the real world.
Canada has many banks with account packages for kids. These accounts range from no-fee bank accounts to kiddies’ accounts with unlimited transactions. For more detailed information, read on to find out all you need to know about the best bank in Canada for kids.
1. RBC Leo’s Young Savers Account
The RBC Leo’s Young Savers Account is designed for kids below the age of 14. The account features a C$25 welcome bonus that boosts your child’s savings.
This bank account also has free Interac e-transfers even though debit transactions are limited to 15 per month. As they grow older, your child may upgrade to a student account, attracting more free transactions and features.
Highlights
- No monthly charges
- Free debit transactions capped at 15 per month.
- C$25 bonus boost for kids who apply before December 31, 2020
- 0.01% interest
- No minimum balance requirement
- Parents can initiate automatic payments for kids
2. Scotiabank Getting There Savings Program for Youth
This bank account for kids provides an excellent incentive for kids in the form of SCENE Points whenever they purchase items with their debit card. Another option is to earn with Scotia Rewards and redeem such earnings towards tech gadgets and gift cards.
Highlights
- No monthly charge
- Unlimited free debit transactions
- Two free Interac e-transfer monthly
- 0.05% interest on deposits capped at C$499
- 0.10% interest on deposits C$500+
- Earn Scotia Rewards at 1Point for every C$5 spent via debit card. Alternatively, earn SCENE Points at 1Point for every C$5 spent via debit card.
- No minimum balance requirement
3. TD Youth Account
The TD Youth Account allows parents to initiate a recurring payments transfer from their account to the kids ensuring that allowances are paid electronically.
Your child may also make transactions like withdrawals, purchases, and cheques for free with the TD Access Card. However, Interac transfers will cost C$.50 per transaction. The account is the ideal choice for kids who aren’t too particular about earning interest on their savings.
Highlights
- No monthly charge
- Unlimited free transactions
- 0.01% deposit interest
- Interac e-Transfer at C$0.50 per transaction capped at C$100 and C$1.00 per transaction after that
- Recurring payment transfer from parent account into the child’s account
- Zero minimum balance
4. CIBC Advantage for Youth Account
The CIBC kids account package is a mix of savings with the benefits of a chequing account. As your kid matures with age and gets more proficient at managing money, CIBC will provide access to a prepaid Visa Card, including online and mobile banking features.
Once your kid is 19, the CIBC Advantage for Youth account automatically gets upgraded into the Premium Growth Account, an account with no monthly charges.
However, this bank account carries a transaction fee of C$1.50 per transaction, making it necessary for your adult kid to sign up for a chequing account for daily purchases and use this strictly for savings.
Highlights
- No monthly charges
- Unlimited free transactions
- 0.15% interest on deposits
- Unlimited free Interac e-Transfers
- No minimum balance requirement
- Automatically upgrades into the CIBC Premium Growth Account once the child attains the age of 18.
- Free SPC membership to enjoy exclusive deals at 450 affiliated stores
5. BMO Plus Plan Youth Chequing Account
Children, 12 years and younger may enjoy this account, which can be upgraded to the Premium or Performance Chequing Plan with more features. The bank account has a lot to offer, including:
- No monthly charges
- 30 free transactions monthly, including free Interac e-Transfers
- Premium Rate Savings at 0.05% interest on deposits
- ATM transactions at C$2 per transaction using non-BMO machines
6. Tangerine Children’s Savings Account
Tangerine Bank offers the highest interest rate of any children’s’ bank account at 0.2%. However, parents will have to bank with Tangerine for their kids to benefit from this offer. If you already have a Tangerine account, this is the best option even though you still have to carefully weigh the drawbacks of managing an extra Tangerine Account against your child’s benefits earning more interest on their deposits.
Highlights
- No monthly charges
- Unlimited free transactions
- 0.30% interest
- No minimum balance requirement
- Exclusively online banking
- Accepts e-Transfers only
Honourable Mentions
7. National Bank Youth Account
National Bank provides a minimalist chequing account for children below the age of 18. Some of the features of the bank account include:
- No monthly charge
- Twelve free transactions and two free in-branch transactions monthly. Additional transactions cost C$1.50 each.
- No minimum balance requirement
8. Laurentian Bank Youth Account
The Laurentian Bank Youth Account is for kids 17 years and younger. Some of the features include:
- No monthly charges
- Unlimited free transactions and two free in-branch transactions monthly
- Free electronic and paper bank statements
Why Does Your Child Need A Bank Account?
A bank account is no longer a luxury but a necessity for your child to inculcate the habit of saving money from an early age. Some of the benefits of a bank account for your child include:
Understanding financial products early
A kiddie’s bank account is an excellent way to understand how money works, learn the values of saving, and how to make bank transactions.
Save their Allowance
A bank account is more secure than a piggy bank and helps the child to earn interest on their savings.
Be More Responsible
Maintaining a bank account allows the child to be more responsible in the future because of the requirements to take care of the bank account.
What to look out for in bank account for kids
Before you consider opening a bank account for kids, you have to make sure the bank account you have in mind has the following features:
- A substantial amount of free transactions including debit and Interac e-Transfers
- Some form of interest
- No monthly maintenance charges
- No minimum balance requirement
Kids Bank Account Benefits and Drawbacks
A bank account set up by a parent for their child is known as a custodial bank account. This account can be used as a savings vehicle, thus posing a few benefits and drawbacks.
While the money deposited into the account becomes the child’s property, in many instances, it cannot be spent without prior consent is obtained from the parent. Some other advantages and disadvantages include:
Advantages
- The money is safe as it cannot be spent without the permission of the parent or guardian.
- The money, subject to the guardian or parental permission, can be withdrawn and used for any purpose.
- It teaches your child to save for items or wait until they can afford to buy them.
- It teaches them to make plans.
- Children learn the value of money at an early age.
Disadvantages
- The money belongs to the child and can only be spent towards their benefit. Once the minor attains the age of majority, they can spend the money on whatever they want.
- Opening an account for your child may encourage wasteful spending, especially if the bank account comes with a debit card.
Dos and Don’t of Opening Bank Account for Kids
Choose Savings Instead of Chequing Account
Firstly, a chequing account is designed for spending money. In this regard, you should be teaching your child how to save and not vice versa. It is advisable to wait until your child is responsible enough to earn an income before opening a chequing account. It may also be necessary to provide your child’s documentation during the account openings process, which may include:
- Social security
- Birth certificate
- School ID
- Passport
Bank Both Online and at the Branch
It is highly likely your child is knowledgeable enough to carry out basic transactions online, but it’s still necessary that they imbibe proper banking etiquette at a physical bank branch. Allow your child to hand the teller their allowance and save their paper receipts. Your child can select a preferred banking method once he or she is older.
Look for High Interest
The best banks in Canada provide an interest rate, but you shouldn’t make that a priority. Focus more on a bank with other features that can be beneficial for your child in the long-term.
FAQs
Which bank has the best children’s account?
There are many banks in Canada with packages for children. However, at 1.2%, the Tangerine Children’s Savings Account remains hard to beat.
How Can I Open A Bank Account without my parents knowing?
It is impossible to open a bank account in Canada without your parents’ knowledge except if you’re 18 years of age or older.
Can a 12-year-old have a bank account?
Yes, a 12-year-old can have a bank account with the permission of their parent or guardian.
