Teen bank account

[Anonymous]

What bank do you use for your kids?

My son has a side job that’s about $60 a month. He would like to open a saving account. Let’s say he gets $20 interest a year. Will he have to do tax return if his own personal account? Currently I’m just putting his money in a side savings account under my name with a 4% interest. He has about $2.5k now with birthday money and extras over the years.

Chase sucks and doesn’t give much interest for basic savings or checking account. But it’s close to us so convenient.

[Anonymous]

Anonymous wrote:What bank do you use for your kids?

My son has a side job that’s about $60 a month. He would like to open a saving account. Let’s say he gets $20 interest a year. Will he have to do tax return if his own personal account? Currently I’m just putting his money in a side savings account under my name with a 4% interest. He has about $2.5k now with birthday money and extras over the years.

Chase sucks and doesn’t give much interest for basic savings or checking account. But it’s close to us so convenient.

Is this a serious question?

[Anonymous]

No he will not. He can start a Roth IRA for the amount of his earnings. It can grow as long as he llkes and he will never be taxed on the income. The actual funding can come from you if you are able.

[Anonymous]

No. Not unless the side job sends him a W-2. Even then he'd have to make at least $11,900 to meet the minimum requirement to file.

[Anonymous]

Thanks for the helpful responses!

And yes serious question.

[Anonymous]

Did anyone open a teen Fidelity account? If so how do you like it.

[Anonymous]

Details on requirements here: https://turbotax.intuit.com/tax-tips/family/at-what-income-does-a-minor-have-to-file-an-income-tax-return/L6HOdGp6i

[Anonymous]

My teen has a CapOne checking acct that connects to their savings acct. They deposit paychecks to checking and then move a set % of each paycheck to savings. Separately, they have a small online stock trading account that they can use to test out investing but only can use that accounts growth or portions of birthday gifts for reinvesting.

[Anonymous]

This come up every week. Don't open anything for the teen because the amount is so small, interest is small, and the trouble you have to go through. They can open Capital One when they are 18.
Please concentrate on the teen doing their homework about stocks, Roth IRA, Traditional IRA, 401k, credit cards.
Have them pick 5 stocks they would like to buy with the $2500 and paper trade (not real trading).
Tesla is a little under $400 right now, so they would get 6 shares. Check back once a month to see if they would have made money or 'lost money'. If it's $450 a month from now, they made money.
Money sitting in a saving account teaches absolutely nothing. It doesn't even teach your kid that Chase just took the $2500 and loaned it out for 15% while paying your kid 3%.
You and your kid have got to be comfortable buying stocks and holding them long term just to be able to keep the purchasing power of the $2500.
Robinhood is an excellent for such small amounts. You can open it for you and then simply give the kid his money back once they turn 18.
There is so much to learn about personal finance, investing, taxes - soon to be young adult will need to know all that and parents are still going for savings and checking account for them.
If you have great credit, the kid should be an Authorized user on one of your cards that reports to credit bureaus. Once they are 18, you get them off to their own cards with great credit.

[Anonymous]

100% of income goes into Roth IRA.

You compensate by providing cash out of Bank of Mom

BofA has a Family (Child) Account that gets a debit card with parental controls, and easy transfer between child account and parent account.

[Anonymous]

Anonymous wrote:Did anyone open a teen Fidelity account? If so how do you like it.

Love ours. No fee Kid gets a debit card. Easy app usage. It is a custodial account so a parent needs a Fidelity account first.

Not a 100% full replacement for a bank/checking account but works great for us.

[Anonymous]

We have Chase, linked to my checking for easy transfers. It's been great and easy.

[Anonymous]

My teens don’t have jobs yet but each have a teen checking and a teen savings account at Capital One for holiday money that they get. They keep most of their money in the savings and move it back and forth online as their checking debit card is linked to their Apple Pay.

[Anonymous]

My teen has so little $ that I opened a sub account w debit card under my navy fed account. They can access separately and I can also see transactions.

[Anonymous]

Anonymous wrote:My teens don’t have jobs yet but each have a teen checking and a teen savings account at Capital One for holiday money that they get. They keep most of their money in the savings and move it back and forth online as their checking debit card is linked to their Apple Pay.

+1 to teen Capital One. We link this to teen Venmo account. Very easy for kids to manage on their own