When asked to any teenager about money, you’ll immediately discover that many assume they are experts on the subject. Teenagers understand that one needs to go to work to make money and that money is needed to pay bills and buy stuff. Most teenagers of this generation understand the importance of conserving money and donating to causes and people in need.
But if you consult any adult, they’ll only hint you about all that there’s still for you to learn. When on the right track, what gets even more important is right guidance ahead.
The stakes rise as teenagers age and begin to make their own financial and spending decisions. The aim here is to gain the knowledge about financial instruments and ingrain a sense of discipline when the stakes are already low. Research has consistently shown that this way teenagers grow up to be more careful and considerate adults when it comes to finances.
Opening a bank account for them can be the first step forward . There are many banks for teenagers offering various services and benefits. A basic feature in all these banks is the use of online transactions. Some new generation banks, referred to as neo banks, are completely digital and have no physical presence. Neo banks have made banking for teens easier than before and also render byte size content to promote financial literacy and money management.
However, how do you differentiate a diamond from a stone?
Here are a few things every teen should look for in a bank.
Things that All Teenagers Should Look for in a Bank?
- Fees associated with opening and operating the account.
Every bank has a different fee structure associated with everyday situations and activities. The minimum balance requirement is an excellent example of what a bank charge looks like. Different banks will have different minimum balance thresholds and charges for when there is less money in the bank account than the threshold.
There might be account charges for a teenager beside a normal personal bank account. They might also be lucrative student bank accounts that offer many services at either a reduced rate or free of charge. Go over these details with a fine-toothed comb and explore all the opportunities that are available to you. Take all the figures into consideration before deciding on a particular Bank.
- Online facilities and operation
It’s imperative for the bank you choose to have a robust online infrastructure. This is because a majority of transactions are made online. For that simple reason, online facilities such as internet banking, e-statements, and the ability to pay utility bills or college fees are a must-have for the bank you choose.
Unfortunately, many banks have less than stellar websites and app interfaces. This might cause a hindrance in your availing services from the bank. However, a simple Google search on other people’s experience in using a particular bank’s online facilities can liberate you from a lot of hassle down the line.
- Presence of ATMs for cash deposit and withdrawal
As much as you’d like to think that cash is no longer relevant in this digital age, you’d be surprised how little things have changed outside cities. In remote areas, the ability to withdraw cash is nothing less than a basic necessity.
Choosing a bank with its network spread out into the most remote corners of the country can help you explore with confidence that you will not run out of money and not have to carry pocket full of cash with you at all times.
Similarly, if you are working small side gigs and freelance work and accept cash payments, the ability to deposit cash in your bank account through an ATM will be a godsend. The risk of losing an entire week’s worth of money if you are mugged is secured by having the option to deposit the cash at the nearest ATM and waltzing away with nothing to hide.
- Documents needed for opening and availing facilities of bank account
The specific documents required for opening a bank account of your choice will vary from bank to bank. For example, you may require Aadhar, PAN, proof of address, proof of income, etc.; each bank has its preferred documents in each category.
Stuff gets even more complex when you try to get a bank loan. They will ask for proof of income and will judge your credibility, i.e., your ability to pay back the loan amount, based on your financial history.
If you are a student applying for a student loan, they will often require the economic history of your parents to be at or exceed a certain credibility score for them to approve the loan. Before signing up for a particular Bank, check what documents they require. Minimum documentation required might not always be the best choice for you.
- Interest rates for all services.
At the end of the day, the bank either gives you money or keeps your money. For each of these circumstances, they either owe you interest on the money you’ve saved with them, or you owe them interest on the money you took from them. The rates of these interests vary from bank to bank. So never forget to compare the rates of all services.
You may think it is highly unlikely for you to use many services like insurance, credit cards, home loans, car loans, etc., but you never know when circumstances change. So always read the fine print and figure out deductions, if any, that can be made on interests payable to you for the money you keep in the bank. The range of these interests would also clue you in on the kind of bank you are dealing with.
- All things beyond the ‘offers’.
A bank is just a financial institution selling access to financial instruments and services. Multiple banks are fighting for your money, and in this fight, they are willing to give you catchy, marketable short-term offers to grab your attention. They might even tie up with your trusted retailers to provide you discounts and offers upon opening a bank account with them.
This might sound like a good enough option if you come across it just as you are about to purchase something. But you need to look at the fine print and see the advantages against the disadvantages in the long term. For example, the bank might have very high fees and might not offer good customer service. In your attempt to save a few bucks, you can end up opening a bank account that might cost you considerably more money in the longer run.