Opening a kids bank account: everything you need to know

Many of us intentionally put off teaching our younger kids about money because it’s such a big and important topic to tackle, and we just don’t know where to start. Who could have thought it would start with opening a kids bank account?

Children aren’t commonly taught financial literacy at school, so, parents, we need to take the lead. But how do you explain sometimes complex financial concepts in a way that children can easily understand and – even more importantly – so that they take an active interest? 

Well, for me, the answer seemed simple: I’d teach my daughter the basics of saving and budgeting by opening a children’s bank account for her.

If your eyes widened at the thought of giving a child so much responsibility, don’t worry; mine did too at first. But, after researching the options available and the safety measures that could be put in place while she got the hang of things, I found a solution I was comfortable with. 

I’d set up a basic transaction account that I could conveniently link to my online banking dashboard to monitor exactly what was happening.

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How do you choose the correct bank account for kids?

When I decided to open my daughter’s first bank account, I had quite a hefty list of non-negotiables. I’d have to be able to monitor what was going on in the account. She shouldn’t have any credit limit; we had to be able to set a withdrawal limit, and it needed to be an affordable account. I’ve banked with Standard Bank since 2002 so my research led me to a Standard Bank (sum)1 account.

Who is the Standard Bank (sum)1 account for?

It’s a basic transaction bank account for kids that offers a safe and simple way to introduce a minor to the world of managing their own finances – and the responsibility that comes along with it.

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Benefits: Why choose a Standard Bank (sum)1 account?

Here’s a no-frills, no-fuss children’s bank account that gives you loads of practical day-to-day benefits. In fact, it’s marketed as a ‘product designed for those starting out’. 

• There are no monthly fees (yes, really!)
• No monthly income requirements
• No minimum balance is required to open the account
• Unlimited free swipes at till points (although you can disable this function if you’d prefer)
• Ten free electronic debit transactions a month
• Free cash withdrawals at Standard Bank ATMs (up to a value of R1 000)
• Free cash deposits at Standard Bank ATMs (up to R1 500)
• Free balance inquiries on your phone *This can be set up to go to a parent’s phone
• Free Standard Bank ATM cash withdrawals (up to R1 000 – after that, you’ll pay R7,50 per R1 000)

Remember that a (sum)1 account is a transactional account, so don’t expect to earn interest. If you want to teach them about savings, earning interest, and the general ins and outs of banking for children, then consider opening an additional PureSave or TaxFree Call Investment account.

What documents do you need to open a (sum)1 account

I know you’ve been spoilt with all the possibilities and convenience of the online world these days, but you’ll have to go to a Standard Bank branch to do this. You’re opening an account for a minor, so it can’t be done online. These are the documents needed to open a bank account for a child:

• The minor’s birth certificate
• The parent or guardian’s ID book or card
• Proof of residence for the parent or guardian (this shouldn’t be older than three months)

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My experience of opening a (sum)1 account at Standard Bank

I found the process quite slick and efficient. Everything you need to know is so clearly listed on the Standard Bank website (click HERE for more details), so I was able to have all the necessary documents ready. I had done my research on the benefits and drawbacks of the account I was opening.

I spent around an hour with a consultant and left with the paperwork signed, the account opened, and we received my daughter’s new bank card. Plus, the consultant linked the account to my online banking dashboard, making monitoring account activity much easier.

From here, my daughter’s pocket money will be deposited into the account, and she’ll be responsible for looking after her own bank card. It’s a big responsibility, but I feel secure in the safety and management features offered by this specific account, and I love that she will have a safety net. At the same time, she navigates the world of finance for the first time.

And what happens when my daughter turns 16 and no longer qualifies for the (sum)1 account? Well, then, it’s recommended that you move her to an equally convenient and affordable Standard Bank MyMo Account, which costs an incredible R4.95 a month!

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What other options are there when opening a kids bank account?

Let’s say you’re not quite sold on the Standard Bank (sum)1 account, and you’re wondering what other options are available. Fair question, and luckily, there are quite a number of different children’s bank accounts offered by other banks.

Nedbank4Me

This transactional account from Nedbank is aimed at children up to the age of 16 and has no monthly maintenance fee. There are no opening costs, and it features other extras like free Nedbank ATM withdrawals, inter-account transfers, and a very cute bank card.

ABSA MegaU

Another fantastic option most stumble upon is the ABSA MegaU account. A youth account for children up to the age of 19 with zero monthly fees and an opening cost of R10. Out of all the other possible children’s bank accounts, this one does come with an extensive range of freebies, which include:

• Unlimited free Absa ATM cash withdrawals
• Unlimited free card swipes
• Unlimited free point-of-sale cash withdrawals
• Unlimited free prepaid top-ups
• Free balance inquiries through any Absa channel (including branch)
• Free emailed monthly statements

FNBy

Compared to the other accounts, FNB does offer a very enticing option when it comes to a bank account for children. Their FNBy is available to children below the age of 18, has no opening cost, and is jam-packed with personalized FNB extras such as:

• No monthly account fee
• No minimum balance requirement
• Unlimited free card swipes
• Free alerts when a transaction is made via inContact
• Access to the FNB App
• Free subscription to all digital channels and zero data charges when using the FNB App

Tips to help get the most out of your kid’s bank account: 

After opening a bank account for your child, there are some things to keep in mind, especially when taking full advantage of its benefits. Having a bank account isn’t just about saving and spending anymore. These are some tips to help your child learn about banking and financial management:

• Let your child have access to their relevant bank’s dedicated app. This creates a sense of freedom and confidence.
• Explain the differences between transactional and savings accounts to show them the variety of bank accounts.
• Talk to them about saving and help them come up with their own savings strategy – even if they’re only saving up for a new toy.
• Let them use their bank card to pay for things, helping them to be more comfortable with the day-to-day of buying and paying.
• As they grow older, give them more responsibility, but always be there to help along the way.

FAQs 

Which bank is best for kids in South Africa?

The debate about which is the best bank account for a child in South Africa doesn’t seem to be ending soon, and which one you choose is totally up to you. A Standard Bank youth account is a fantastic choice, but it’s always good to do your research and find which suits your needs. 

Can I open a bank account online for my child?

Yes. These days, you can do pretty much anything online, and opening a kid’s account is no exception. Depending on which bank you choose, the requirements may differ based on the type of account you select.

At what age should a child have a bank account?

Again, this one is up to you, but the right age is around 15 or 16 for many. This does not mean that you shouldn’t teach your kids about banking and finances; starting them early is a great idea.

FURTHER READING: If even more parent advice right here.