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Canadian Bank Accounts for Kids

A few years ago we took the kids down to our local RBC and signed them up for a Leo Account. I did some online research to find out which Canadian bank offered the best bank accounts for kids. They were all so similar that no single bank was a clear winner. The only incentive at the time was with Royal Bank who offered a bank tour which ended in the vault. There each child would find 5 loonies in a safety deposit box to start out their accounts. I was really impressed with the level of service we received. The kids were treated like VIPs through the whole process and they came out feeling valued and excited to start their financial journey.

When I began doing the research for this post, I was disappointed to find Royal Bank had discontinued this incentive. I even called them directly to confirm that they no longer offered it.

If I were choosing again today, I would choose one of the banks that offered unlimited debits. Debit use isn’t a huge issue yet for my kids but I’ve met many teens who use their debit cards frequently and exclusively. Fifty or sixty five cents may not sound like much, but if your teen is using their debit cards a couple of times a day, it will add up quickly.

When comparing the different bank accounts for children and youth offered by Canadian banks, I was disappointed to find how little information was available online. I had to call five out of six banks to get the basic information found in the chart. Scotiabank was the only bank with an easy to navigate website and all of the information I needed all in one place.

Keep in mind interest rates change frequently. The rates posted are for the lower balance amounts but even for high balance accounts. There was no rate over 1% at any of the big five banks.

Kid's Bank Accounts

What do you need to do to set up a kid’s / youth bank account in Canada?

  1. Call to set up an appointment. You can ‘walk in’ but if someone is there to meet you, the process will go a lot more smoothly.
  2. Bring your child’s Social Insurance Numbers (SIN) with you. If your children don’t have one yet, you can find out more about how to get one here: http://www.servicecanada.gc.ca/eng/sin/apply/how.shtml
  3. Bring a birth certificate and / or passport for ID and to confirm they are under 19. All children’s / youth bank accounts in Canada are only for kids under 19.

My financial journey begin the day my parents took me down to the local Canada Trust and signed me up for a children’s bank account. Setting up a bank account for your children is a great way to start them on their financial journey.

Editors Note: Until the end of Sept 2009,  ING Direct is offering a $25 bonus for all Childrens Savings Accounts (CSA). Note though that only existing account holders can open a CSA.  If you are not an existing member, you can join, collect $25 for your account and $25 for your childs account.  Find out more in my ING Direct Review.

Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.







27 Comments, Comment or Ping

  1. Kathryn,

    May I say you are looking much better… your picture before made you look, ahem, somewhat drawn.

    ;-)

    That was a really great idea that RBC had… and then decided to nix. Reminds me of a certain hotel chain (I can’t remember which) that placed a “Kids Club” step at the front desk so that the child could be part of the check-in process.

  2. 2. Ramona

    At age 12, we set my son up with a President’s Choice account. Absolutely no service fees, just like for us adults. And nice too, his account is tied to mine, I can transfer money to him, and also check on his activity. Initially he wasn’t offered cheques, just debit, but now that he is 16, we were able to get cheques – also no fee for purchase or use. It’s worked very well for him thus far. Something else we did when he hit 14 was to give him his allowance monthly – this gave him the incentive to budget and plan for the entire month so that he didn’t run out of funds. He’s come close, but always has money left by month end.

  3. 3. Kathryn

    CF: That was a good idea RBC had!

    Ramona: The person at PC in store told me you had to be 16 to set up an account. I just called to confirm and you are right, you CAN set up a no fee account with PC for kids as long as there is a parent on the account! Thanks for letting us know about this option as well.

    The thing I like about a bricks and mortar bank for kids is that they can ‘see’ how banking works. Virtual / online banks are very abstract for most kids under 12. I like that they deposit their money into the account and go there to take it out again. In a few years I think we’ll switch them over to PC to avoid any fees as they get older.

  4. 4. nobleea

    “Reminds me of a certain hotel chain (I can’t remember which) that placed a “Kids Club” step at the front desk so that the child could be part of the check-in process.”

    I think some Fairmonts have this. I recall seeing one in JPL.

  5. 5. wx_junkie

    The folks at BMO informed me that they have a cash incentive for kids to open an account with them, whereby the child will dig their hands into a big bucket of dimes. However many they can pull out in one huge grab, BMO will deposit into the account as a starting balance. I thought that was pretty neat.

  6. 6. csplice

    Any idea what happens to the accounts once the child reaches 18 or 19 years old?

    In my case my childhood account was automaticly converted to a chequing account with a $1000.00 minimum required for no-fee-status. Locking into an account for my kids future seems to be the biggest selling feature of these accounts since no one knows what will be available in the future.

  7. 7. Charles in Vancouver

    Don’t forget that if your kids enter university or college before they turn 19, the same bank may allow them to convert the no-fee Youth account to a no-or-low-fee Student. That’ll give them a few more years to decide where to remain.

  8. 8. Elbyron

    I don’t have any kids yet, but when I do I’ll probably set them up with PC Financial. Though a “bricks and mortar” bank may be easier for the kids to understand, I think it’s important that they learn that money can be held virtually, not just in physical cash. Having unlimited transactions means they’ll never have to worry about how often they use a debit card, and will never get stuck paying monthly fees when they’re older. True, some children’s accounts will transition to a student account, but those often have strict limitations and are only good while in school. Why not get them familiar with using a bank that offers an unlimited account for free?

  9. 9. Paulo Dunlop

    I just don’t understand why ING Direct has a lower interest rate for Child Saving Account then a regular savings account. It should be the same!

  10. 10. Kathryn

    csplce: When the child turns 19 it will automatically change over to a regular account … which means for most banks, the kind that have monthly fees. Ours kids will have a no fee account with PC well before this happens.

    Paulo: It is the same as the investment savings account (which dropped today to 1.05). It’s the Tax Free Savings Account with ING that has the higher rate.

  11. 11. Cash Instinct

    Comment related to hotels: Delta Chelsea in Toronto has a step for kids at the front desk (identified that way), but it’s not really where is check in / check out is, it’s pretty close though.

    Kid accounts: If I had a kid, I would open them an account where I do my banking to simplify finance (I would not want to go elsewhere only for kid account). However, CIBC seems to win on this one (considering a virtual bank is not an easy thing for a kid to have access to their money). I would open a ING account for savings and for getting the bonus, however it won’t work for day-to-day (like adults need another account).

    NOTE: Kind of off-topic, but if someone from ING is reading: please offer a free-chequing account (For adults at least!!!) . This is much due, especially for people in Quebec that do not have access to alternatives such as PC Financial. The fact that Citizen recently shut down their free account gives you a great occasion to offer this service and get many customers that are looking for a new account.

  12. 12. Ramona

    @ Kathryn – I understand your reasoning about the bricks and mortar – for younger kids. Once kids get more worldly (about age 9!!), they are exposed to so much online, it is not unreasonable to use an online bank. Also don’t forget that you can transact at any CIBC branch when banking with PC Financial. Best of both worlds I guess.

  13. 13. Greg

    I think kids are far more comfortable looking at bank info on the internet where they can get instant account updates and track their spending. The only reason to ever go into a bank branch is to teach your kids to wait in a line up for bad service which they will eventually have to pay fees for.

  14. 14. Kathryn

    Greg: Your argument is persuasive as is Ramona’s. Had I not been told at the beginning that the kids had to be 16 to set up a PC account, we’d be with them already. I will add PC to the chart and re-submit so when people google this topic in the future, they’ll know PC Financial IS an option for kids.

    Now, if only I could convince PC to let me name my accounts like ING does. With more than one child, it sure would simplify things.

    wx: It seems that individual branches have a lot of discretion when it comes to incentives. I like the one your mentioned. If they advertised it, even something as small as this would bring new customers.

  15. 15. Andy

    CIBC offers the Youth Premium Growth Savings Account
    If you are 18 and younger you get
    1. unlimited transactions
    2. Bonus Interest
    All the details are on CIBC.com under savings account (youth)
    In summary you get an UNLIMTIED CHEQUING ACCOUNT WITH BONUS INTEREST.
    Current interest rate 0.4%

  16. 16. Maiku

    Hi Kathryn,

    There are actually some Youth accounts that go past 19. The one I know of is the Vancity Youth Account which according to their website includes the following and is good up until 25.

    # no monthly fee
    # unlimited free transactions for:

    * in-branch, Member Service Line, Phone Banking and online banking withdrawals, bill payments and transfers
    * point-of-sale direct debit
    * cheque clearing and pre-authorized payments
    * Exchange ATM withdrawals and transfers (note: fees apply to non-Exchange ATM transactions)

  17. In my experience – large banks generally don’t give very high rates to begin with.

    You may be able to maybe get higher rates from a smaller bank. – You’re only risk is that the smaller bank can go bankrupt – but it shouldn’t be too much of an issue if the bank is insured.

  18. 18. Kathryn

    Maiku: Thanks for sharing with us about the Vancity accounts.

    Anyone else know of good regional banks or credit unions in your area that offer bank accounts for kids? Feel free to post them here.

  19. Good tips for anyone looking to open a bank account for their child. I remember back when I opened my very first RBC account. They were very friendly and I still use them for almost all of my banking. So it is very important to take the time to choose the best bank & account for your child. Chances are they will stick with that account for many years.

  20. Perfect timing. My 15 y/o just started his first job and we’ve made an appointment with Canada Trust. We’re looking into a debit card that takes a few cents off each time he uses it and puts it into a savings account for him. Pretty sweet deal huh?

    Btw, you’d be surprised at how many places of employment actually require your kid to have a bank account now for direct deposit purposes. Back in the day, my dad used to cash my A&W work checks through his account lol.

    I just came across this site today but I’m really impressed with the content I’ve read thus far :)

  21. 21. Lianne

    While I agree that kids these days are extremely comfortable online, I would argue that establishing a face-to-face relationship with a financial institution is very worthwhile. They need to get comfortable with their bank or credit union and ideally develop an ongoing relationship. That will serve them well when they need to apply for a loan, mortgage or need financial/investment advice.

  22. 22. K

    I recently took my kids (10 and 12) to set up a youth account at CIBC. The people were friendly and treated the kids like a million bucks but I was extremely disappointed to hear that the youth Premium Growth Account pays NO interest on accounts of less than $5,000. (To “compensate” for this, the account representative said they could open a $500 GIC, half the usual minimum balance for a GIC.) Both kids decided to go elsewhere (still looking!), with my 10-year-old daughter saying to me “I might as well just hide my money under my bed. Then I won’t have to wait in line to get it out, like at a bank. And if they think most 10-year-olds are going to have $5,000, they probably don’t know very much about 10-year-olds and I’m not going to get very good service.”

    Both kids understand that, at most, they’ll get only a few cents interest. But, on principle, they feel strongly that if they’re going to loan their money to the bank by depositing it in an account, the bank should at least cough up a bit of interest. And I was interested in having them see, first-hand, how the financial world/interest system works. Any ideas where we can go to meet those aims? From our perspective, CIBC was a failure.

  23. 23. Tracey

    Thanks! What great info. My 8 year old just got her 1st paycheck for being a movie extra and is dying to put it in the bank. We’ll be heading to PC financial to open her account. I love that it can be tied to mine. It sure will make thinkgs convenient as she gets older.

    Thanks everyone!

  24. 24. Tara

    I opened my first “bank” account when I was about 6 years old at what was then Surrey Metro Savings. I had a chequing account and a savings account, which earned about 0.05% interest and a debit card with 30 free transactions per month. Junior accounts also come with free cheques. When I was about 17, I switched to their Unlimited Chequing account which is free, but no longer gives me free cheques.

    Looking at the Coast Capital Savings website now, it looks like youth accounts give 15 free transactions per account per month, while youth are also eligible for the free Unlimited Chequing account and they still have the free cheques for kids.

    They’re mainly located in the Greater Vancouver Regional District and the southeastern portion of Vancouver Island (Nanaimo to Victoria, along the coast), but if they’re available for you, I have been a very happy member since I was 6, even while I moved back east to go to university. I tried CIBC and PC Financial each for awhile, but neither of those lasted very long.

  25. 25. Dan

    I would recommend avoiding the President’s Choice account. We opened one for my daughter and they keep freezing it because she goes too long between transactions. It seems every time she goes to do a debit the account has been frozen for non-activity. Unfortunately because it is a “one size fits all” account, they expect adult level transactions even from a child.

  26. 26. Twinmom

    We just opened one for our kids with our Credit Union – no fees, very personalized service and $20 share to start your account. Anothe option to look into! We’ve been with them for a long time – no fees on anything, great mortgage rates, cash rebate on mortgage interest and really great service.

  27. 27. Kimmie

    I re-scheduled an appointment to open up two youth accounts for my children with Scotiabank to take advantage of an upcoming promotion. Starting June 16, 2014, each kid will get 5 free SCENE movies for opening up a youth account. 10 free movies is worth the wait in our eyes! They also allow unlimited transactions now (instead of 20 max mentioned in your chart).

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