The current picture of teen banking

About 6 in 10 teenagers have a bank account, according to the most recent data from the Federal Reserve's Survey of Household Economics and Decisionmaking. That figure has climbed steadily over the past decade — in 2013, roughly half of teens had accounts. The number varies by age: older teens (16 to 18) are more likely to have accounts than younger ones (13 to 15), and it shifts based on family income, race, and whether a parent or guardian has a bank account themselves.

The jump matters because it reflects a real change in how young people access money. A teenager with a bank account can receive paychecks directly, build a credit history earlier, and learn how transactions actually work — not just in theory, but by watching money move in and out of their own account. But the variation in who has accounts also shows that access is not evenly distributed.

Key Takeaways

  • Approximately 60 percent of teenagers have a bank account, up from about 50 percent a decade ago.
  • Older teens are significantly more likely to have accounts than younger teens, and account ownership rises with family income.
  • A parent or guardian having a bank account is one of the strongest predictors of whether a teenager will have one.
  • Teen accounts often come with restrictions on withdrawals, overdraft protection, or spending limits that differ from adult accounts.

How age shapes account ownership

The gap between younger and older teens is substantial. Teenagers aged 16 to 18 have accounts at roughly twice the rate of 13- to 15-year-olds. This tracks with employment: most states allow work permits starting at 14 or 15, and many teens get their first job between 16 and 18. A paycheck is often the trigger that prompts a parent to open an account or a teen to ask for one.

Banks also set their own minimum age requirements. Most major banks allow accounts for teens as young as 13, but some require 16 or older. A few require a parent to be a co-owner until the teen reaches 18. These policies vary by institution, so the age you can open an account depends partly on which bank you approach.

Income and family banking history matter more than you might think

Teenagers from households earning more than $100,000 per year have bank accounts at significantly higher rates than those from households earning less than $25,000. The difference is not small — it can be 20 to 30 percentage points. This gap reflects both the ability to maintain a minimum balance and the likelihood that a parent already banks somewhere and can help a teen open an account.

A parent's own banking behavior is one of the strongest predictors of teen account ownership. If a parent has a bank account, their teenager is far more likely to have one too. This is partly practical — a parent can co-sign or co-own an account — but it also reflects financial knowledge and comfort with banking that gets passed down. Teenagers whose parents do not have accounts face a steeper barrier: they may not know where to start, and some banks make it harder for minors to open accounts without a parent present.

What teen accounts actually include

A teen account is not the same as an adult account. Most banks offer accounts specifically designed for minors, often called youth accounts or teen checking accounts. These typically come with a parent or guardian as a co-owner or authorized user, which means the adult can see transactions and set limits.

Common restrictions include daily withdrawal limits (often $500 to $1,000), no overdraft protection or overdraft fees waived, and no check-writing privileges. Some accounts block online transfers or require parental approval for certain transactions. The point is to let a teenager learn how banking works while the parent retains control. As the teen ages — usually at 18 — the account can convert to a standard adult account, or the parent can remove themselves as co-owner.

Why the numbers have climbed

The rise in teen banking over the past decade reflects several shifts. Direct deposit became more common, so employers could pay teens electronically rather than by check. Mobile banking made it easier for teens to check balances and see transactions on their phones. Banks also began marketing teen accounts more actively, recognizing that early customers often stay with the same institution into adulthood.

The pandemic accelerated this trend. Schools moved online, reducing the use of cash for lunch and activities. Contactless payment became standard. Teenagers who might have used cash for small purchases instead needed a debit card or a way to send money to friends. Many families opened accounts for teens during 2020 and 2021 for these practical reasons.

Who still does not have accounts and why

The 40 percent of teenagers without accounts are not a small or random group. They are concentrated in lower-income households, in rural areas where banks are less accessible, and among families that have had negative experiences with banking — overdraft fees, account closures, or difficulty maintaining minimum balances. Some families rely on cash or prepaid cards instead.

Immigrant families sometimes face barriers: a minor may not have a Social Security number, or a parent may not have documentation that banks require. Some teens in the foster care system have accounts opened for them, but others do not. The variation in who has accounts reflects real differences in access, not just choice.

What happens after a teen gets an account

Having an account early matters for building financial habits. A teenager who can see their paycheck deposit, watch it decrease as they spend, and experience running low on money learns cause and effect in a way that allowance or cash does not teach. They also begin building a banking history — not a credit history yet, but a record with the bank that can matter later.

Some teens use accounts to save toward a specific goal: a car, college, or moving out. Others use them to manage money from a job or side work. The account becomes the place where financial life actually happens, rather than something abstract. For teenagers without accounts, that learning happens later, often in college or after their first job, which means they start adulthood with less practice.

Frequently Asked Questions

What age can a teenager open a bank account?

Most banks allow accounts starting at age 13, though some require 16 or older. A parent or guardian usually needs to be present or co-sign. Check with your specific bank for their minimum age and what documents they need.

Do teen accounts cost money?

Many teen accounts have no monthly fee, but some banks charge a small fee if the balance drops below a minimum or if the account is inactive. Some accounts become free once the teen turns 18. Read the fee schedule before opening.

Can a teenager open an account without a parent?

Not typically. Most banks require a parent or guardian to co-own or authorize the account for minors under 18. A few banks allow teens 16 or older to open accounts alone, but this is uncommon. Ask the bank directly about their policy.

What is the difference between a teen account and a prepaid card?

A teen account is held at a bank and builds a banking history. A prepaid card is loaded with money but does not create a relationship with a bank. Accounts offer more features and lower costs over time, but prepaid cards require no minimum balance and no parent involvement.

Does having a teen account help build credit?

A bank account alone does not build credit. Credit comes from borrowing money and repaying it — a loan, credit card, or line of credit. A bank account is a foundation, but a teenager needs a credit product to start a credit history.