Most people learn about the importance of money during their teenage years. This is the age when people start to engage in part-time work. Teenage is therefore the best age to start managing your own finances and to open a bank account. Today, many banks have accounts specially aimed at teenagers who are below the age of 18. These teenage accounts, however, do not have the advantages of banking that people over the age of 18 enjoy, like having a bank overdraft. Such teenage accounts are called custodial accounts. In essence these accounts are savings accounts, in which teenagers can save the small amounts of money that they receive through part-time work and gifts.
Custodial bank accounts help teenagers to start developing the culture of saving at a younger age, so that when they finally become adults they will have some experience of saving money.
Investing for Kids helps teenagers to learn to avoid temptation and impulse spending at an early age. With their own bank account, teenagers learn important life lessons at a young age, enabling them to cope well with adult financial life.
Custodial accounts give teenagers the ability to control their own finances at a very tender age. As a result, they learn to start living within their own means as the funding from their parents begins to subside. This independence enables teenagers to stand on their own at a very early age.
In addition, the custodial account makes it possible for teenagers to start paying for their own expenses and bills. This gives them the opportunity to learn how to become responsible financial controllers. It also allows them to get used to the culture of personal responsibility, both in their teenage years, and in their later, adult life. These are the main benefits of custodial bank accounts for teenagers and their parents.