As a teenager there are several factors to consider when choosing a
bank. Saving money is an important skill to learn early in life; it
provides you with a sense of purpose, an ability to interact with
the commercial side of life and an opportunity to develop
self-discipline about saving and spending money. Choosing the right
bank when you are a teenager should be about complementing your
needs and meeting your needs with the least amount of hassle, red
tape and loss of funds through fees.
Steps
-
For many young people, travel is a major savings
incentive
Consider the purpose for your account. The purpose for an
account will impact on they type of account that you are looking
for and it will also influence your decision whether to use a bank
for short-term savings or for longer term investments. Consider
such questions as:
- Do you have a summer/after school job that you need a bank
account for?
- Do you want a checking account, or a savings account?
- Do you want to save your money, or just keep it safe until you
spend it?
- Do your homework. Check out the banks in your area, and
research which ones offer better packages for an account. One bank
might give you a check account complete with a check book; yet
another might give you a special credit line. The important things
to look for include:
- What are your spending and saving needs? Does the bank match
these?
- Are the options offered by the bank likely to encourage saving
or discourage it?
- What are the bank's fees? These can sometimes be an awful
surprise - know in advance and match the fees to your likely use of
the bank. Most banks will start charging the more you use the bank
- ATM fees, check fees, teller fees etc.
- Does the bank offer a youth or student package that is relevant
to you? Often such packages come with better fee deals and
sometimes good interest.
- What are the interest rates?
- Is there a possibility of a combined account structure? For
example, one such structure could be some savings, some spending
but both contributing to interest building.
- Make comparisons. You have done the homework. Now do the
comparing and ask such things as:
- Which bank has the best fees for what you are seeking?
- Which bank has the package that you are seeking?
- Which bank has special deals for young people? Compare
them.
-
Think about location. Location is very important. Some banks
are very localized and it may be difficult to find branches or
shared branch locations elsewhere in your country or even overseas.
If you are about to graduate from high-school, you may be studying
somewhere else than your local region, so keep this in mind when
choosing a bank. Consider choosing a bank with many locations, so
that when you go to college, you don't have to get a new account,
or leave your bank account behind. For those who are traveling,
ensure that you get an account that will allow you to withdraw
money overseas - ask for an ATM card that carries the "Cirrus"
symbol on it - an indicator that you can use automatic teller
machines in many parts of the world.
- Go for the free account. A good bank will let you open
an account for free and won't have any fees on it. You may even be
able to get an account that gives you a debit or ATM card for
free.
- Ask your parents. Have a parent help you look at and
compare different banks, as well as helping you to select the most
suitable one. As a teenager, unless you are 18, you may not be able
to open an account without a parent's name or permission, depending
on your country's rules. Whatever the rules, it is always a wise
solution to seek your parent's cooperation - many a parent will be
more than happy to help add savings to your account when you
demonstrate the initiative and self-responsibility to open a bank
account.
Tips
- Choose a debit card over a credit card. That is, the type of
card that draws on cash that you actually have. If it doesn't work,
it is a sign you've run out of cash and you need to balance and
reconsider your spending options.
- Create goal charts for savings. Some banks will help you by
providing something. If not, it is great to draw up a barometer
with savings goal points that you color in when you reach each
savings milestone, doing so until you reach the top goal. This
works brilliantly for encouraging savings for travel, studies
abroad, a car etc., as you can see the barometer going up and up,
urging you to save even more.
Warnings
- Don't choose a bank because of an exciting credit card offer.
Credit cards don't give you free money - only money that is yours
"for now" and that the company will expect back from you at a later
time, usually with hefty interest. Unless you have a specific
purpose for a credit card, and the money to pay back the bill, it's
foolish to pay for things with a credit card. Stick with debit
cards and cash.
- Don't choose a bank just because it is giving away free iPods,
gift vouchers or other such incentives. Make sure that the deal
being offered by the bank suits your needs; otherwise, you may end
up paying for those "freebies" in fees.
