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Opening a Bank Account for a Toddler





As this was the first Christmas that our toddler really understood the concept of “Santa Clause”, the number of gifts under the tree were greater than ever.  Christmas has become magical again in our household.  Along with regular toys,  some family members gave cash as a gift.  What’s better than cash right?  While the amount wasn’t that significant, it was enough to make me think about opening a children bank account.

When I was just old enough to start school, my parents opened a bank account for me.  Back in those days, lining up for the teller and using deposit slips were the norm but debit cards were fast becoming popular.  I had the account with CIBC which I remember receiving incredible amounts of interest but, then again, it’s all relative.  Even back then, I remember being a saver and enjoying watching my bank balance grow.

With the intention of showing my kid(s) the ins and outs of how wealth/money works, what’s a better way to start than to open their very own bank account.  It can’t be any account though, the main criteria would be:

  • No annual fees – I avoid annual fees. With a low expected balance, fees would decimate the account.
  • Easy to access – I’m all about keeping it simple, so the bank or their ATMs must be close to the house.  The branch also have decent working hours in case I need access to a teller or my financial rep.
  • Connected to one of my bank accounts – Along the same lines above in keeping things simple, the account must be connected to one of my online accounts.  That way, I can transfer money to the account with ease for allowances, birthdays, a reward etc.

With that in mind, I went back to an old post about Canadian Bank Accounts for Kids which compared all the options available.  I decided to stick with my main branch as it would be convenient with no fees.  Within the post, it explained the process involved.  Unfortunately, I didn’t re-read that post before heading to the branch.

  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.

As mentioned, it happened a bit differently for us.  It was the holidays and I had to do a bank deposit.  As I always bring my toddler with me to do bank deposits, it just so happened that the branch was open.  So I thought,  why not open the toddlers account while I was there anyways.

Here’s what happened with us:

  1. We just walked in -  As we didn’t have an appointment, we lined up to talk to the tellers  about opening an account.  Fortunately, one of the bank reps had some free time available to help us out.
  2. Didn’t have the documentation – As I wasn’t quite prepared for the account opening, I didn’t’ have the toddlers SIN or Birth Certificate with me.  Perhaps it’s because I’ve been a client of that branch for most of my life, but all they required was my drivers license.
  3. Special Requests – As the account was connected to my account, I had to request a separate bank card.  I figure the personalized card would be a great learning tool for future visits to the ATM.  As well, we opted for the monthly statements so that the new account holder can review and feel a little special for receiving important mail.

After signing off on the papers, and creating a few passwords we were done!  The whole process took about 20 minutes, just fast enough to keep the toddlers attention.  In the end, we have a no fee bank account, including a bank card that is connected to my main accounts.

Have you opened an account for a child before?  Which bank did you go with?





20 Comments, Comment or Ping

  1. We are planning this very thing. The plan was to do it at TD. Have been meaning to get to it for a while. Hopefully I’ll get a chance in the next couple of weeks.

    My bank account as a youth was at RBC. A decade after opening it I was in there trying to do something and got rejected because my signature did not match that of the on-file signature card. When I caught a glimpse of the signature card, it was the scribbles I made at age 5 or 6. d’oh.

  2. 2. Brian

    I have bank accounts for both my children. They are now 14 and 11. The 14 year old has her own bank card with a 100 dollar spending limit. She also contributes a portion of her allowance to investing and any cash she gets for her birthday or grandparents she lets me know how much she wants in her savings and in her investing. The younger one saves all the time wether it is in her account or her piggy bank. Because I work for a bank, I don’t have any fees associated with any of my accounts.

  3. 3. Varun

    I was planning to open an account for my infant as well. Not sure if there is any advantage from a tax point though. If it is interest income it is taxed in the hand of the co-signer (parent).

    Informal trust does not work from CRA perspective. Creating formal trust is expensive. Finally after my research I decided not to go ahead with this.

  4. 4. Don

    This is a great idea! My wife and I started to educate our kids about money management at a relatively young age and I am proud to say that, many years later (they are 25, 26 and 28 now), they all manage their money prudently!! Our youngest already has his own business in BC and has probably started his own journey to $1MM.

  5. 5. Yun

    Thank you for another great post. I have a toddler too and have been thinking how to deal with his gift “income”. Opening an account for him is a great idea. For me, I am thinking if I should use the money to top up his RESP account as this will not trigger any extra tax for me

  6. 6. Echo

    Great idea! My mom worked for a bank and opened savings accounts for my brother and I when we were really young (we weren’t toddlers mind you). I have considered doing this for my daughter (she’s 20 months old) but have decided to focus on RESP contributions for now.

    I think I’ll wait until I can explain the concept of money and savings to her, and then set up a savings account to save a % of her allowance and gifts.

  7. 7. tthompson

    I’ve had all sorts of trouble actually opening accounts for our two children. We bank through PC Financial, and have had zero trouble with it, except they don’t handle childrens accounts, and every other place I’ve gone to wants me to open an account as well.

  8. 8. will

    What bank gives free accounts for kids?

  9. I opened accounts for my kids at ScotiaBank. No fees and I can manage it online. They basically have the basic account (no fees) and the high-interest account.

    Same as you, I walked in … luckily we could get it done fast and deposit the money.

    My oldest now likes to see the few cents she earns in interest per month.

  10. 11. flying dutchman

    think of doing the same soon, so very timely post, now that you mentioned it, I do remember your OLD post too:) Will be packing the SIN and Birth Cert!

  11. 12. Kevin

    Not to be nitpicky, but shouldn’t that be “Claus”?

    “The Santa Clause” is a bad Disney film.

  12. 13. nobleea

    I can see having a bank account for a child that might have a paper route, or at least can tell the difference between a nickel and a quarter in terms of monetary value.

    But a toddler? That’s classified as ages 1-3. That seems a little far fetched. It’s not like the money is going to generate any more interest in a child’s account versus yours. Open a sub account if you want.

  13. 14. Future-MoneyBags

    I never wanted a bank account until I was 13. Before that, I kept it in a ‘cash box’ in my closet! I was the only one with a key, and I had a spare hidden somewhere.. lol
    After I saved up nearly $1000 I figured it was time to open a bank account. I went with a joint-account at CIBC with my mother. She had to co-sign in order for a minor to open. it had bank fees, which actually helped me. I asked the bank teller how much I needed to waive the fees, they told me disappointadly, “$1500″. I said “no problem”. A few months later I had a no-fee bank account, with a growing monthly balance.

    As for which banks have free banking, many have student plans that last until the age of 19 or 21. I don’t see why these would not apply for ‘younger-than-students’ as well.
    Also, if the account is linked to your parents, it could easily be no-fee. As long as the main account holder, has the designated main account above the minimum account balance, all the sub-accounts will have no fees.
    (There are acceptions for checking accounts, which sometimes require min. balances to waive fees as well)

    I now have 8 accounts linked with my 1 bank, BMO. All with no-fees, and all with a different purpose which I use on a month-to-month basis.
    Some aspects of raising kids may be daunting, but there are also many others which I look forward to…when the time comes to ever have kids :>) Teach them the things I learned and can benefit from.

  14. 15. Sampson

    We opened one at TD for my son… when he was less than 1 month, but now when I reconsider it, I have no idea what purpose it serves. We were going to put monetary gifts for him in there (still trying to be honest parents), but its not like I’m teaching him about money yet, but soon.

    I’ll just have to borrow his money, interest free for the time being – vacation time! ;)

  15. 16. Susan

    I opened accounts for my boys around age 4. 2 reasons – first they saw only debit cards and the magic money machine (ATM) so I wanted to get them to understand the process and second the money is safer that way. Grandmas 20s and 100s can go missing but in the bank they are available yet secure. I about to get a new visa debit for my 15 year old so I can finally get my credit card off the Xbox account.
    Good luck if you ever have to phone in and dont remember your telephone banking password. This is where privacy rules are ridiculous. They had to have my 5 year old verify his identity and they use the same stupid questions they use for adults – last transaction, bills linked, address and SIN and they don’t let you answer for them. Stupid privacy rules!

    Susan

  16. 17. bubak

    My wife tried to open a PCFS account for my son to save up his UCCB payments a bit after he was born. They said it couldn’t be done and yelled at her as if she was pulling some major fraud or something.

  17. 18. krantcents

    Never too early! When our children was young, they deposited 50% of any cash gifts. When they were older, I matched every dollar saved to buy a car. Savings were important lifeskill when I was young and I encouraged it with my children.

  18. 19. Moneycone

    It’s been ages since I went to a bank to do anything! But I agree, never too early to start saving!

  19. 20. Paul

    I was googling as I am looking at doing the same thing. It is a shame how banks here do not do what they do in England (where I am from) and make it almost like a club to be in with magazines being delivered, higher savings mean greater gifts. the famous one in England was with Nat West who gave piggy banks (nat west is no more btw).At 10 pounds you got Baby. All the way up to like 500 pounds for Daddy piggy. If you have a whiole set they are worth quite a bit of money, collectors items.

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