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The Nitty Gritty

Banking Basics: Checking and Savings for Teens

One of the first steps towards #adulting is having checking and savings accounts in your own name. These accounts allow you to save and spend your money, pay bills, and more. Unlike your piggy bank, both accounts require you to take a more active role in managing and budgeting your money to help you achieve your financial goals.

Let’s take a closer look at the basics of checking and savings so you feel prepared to make some smart financial choices of your own.

Opening your accounts

We may be a little biased, but credit unions are a great place to start. Credit unions are not-for-profit financial institutions owned by their members (account holders), which means they often have better rates and lower fees than banks.

Ardent has free accounts designed just for 13-to-26-year-olds: the Stash Account for saving and the Cash Account for spending. The account will be in your name. However, if you’re under 18, you’ll need a joint owner who is over 18 years old.

Both accounts have many of the same features as our regular adult accounts, plus some that are even better—think monthly ATM surcharge fee refunds, tiered interest rates so that you earn more for saving more and debit card rewards points you can redeem for cool stuff. Plus, your accounts will automatically become adult accounts after you turn 27, so you’re set for the next chapter of your life.

Starting your savings account

The number one way to prepare for a successful financial future is to get into the habit of regularly setting money aside. That’s where your savings account comes into play.

If you put a portion of every paycheck into your savings account, it won’t be long before you accumulate an impressive sum. Financial experts recommend keeping three to six months’ worth of expenses tucked away in a savings account as a cushion, because there is no tax consequence or penalty to take funds out when you need them. But if that goal seems out of reach, start smaller: Start with a goal of saving $100 or $500 in 6 months. Then bump it up to $1,000 in a year, and so on.

Many savings accounts allow you to earn interest on your balance. This is called the Annual Percentage Yield (APY), which is added to your account periodically. Financial institutions are required to include the APY number when they advertise interest-earning accounts. The number shows how much money your deposits will earn if they are in the account for 12 months.

So how do you start your savings habit? When you open your account, be sure to sign up for automatic transfer of funds when you open the account. Just choose the amount you want deducted regularly from your checking account and deposited into your savings account. Once that’s done, saving will be a breeze.

Managing your checking account

Checking accounts help you to easily make purchases, pay bills and are often where your paycheck will be deposited. As their name suggests, they often come with a checkbook. Compared to keeping your cash in a jar or piggy bank, funds in your checking account are insured and won’t be lost. You can use your debit card to make purchases using the funds in your account or withdraw money at your financial institution or an ATM. You may also choose to link your debit card or bank account to Venmo, Cash App or another mobile payment service to send and receive money with others.

After you open your checking account, it is your responsibility to handle and monitor it. This logging in using your phone, computer or tablet to see how much is in your account regularly, reading your bank statements for accuracy and never making debit card purchases or writing checks for more money than you have in the account.

Remember to be careful with checks. For checks you deposit, there can be a delay before the check clears and your money is accessible. Paper checks you write will not show up in mobile banking until they are cashed by the recipient. Never write a check before you have enough funds to cover it in the account; It’s still possible for a check to clear the financial institution the same day you write it.

Here are some important tips for managing your checking account wisely:

  • Don’t bounce checks. If there aren’t enough funds to cover a check, it will be rejected when it comes in for payment. The check will be sent back to the person who deposited it and you will be charged for bouncing it. The merchant you wrote it to cannot only charge a returned check fee, but you may be charged a hefty fee by your institution. In extreme cases, you may even be subject to court proceedings. To prevent bounced checks, many financial institutions offer overdraft protection. This means that if you try to spend more than is in your account, the overdraft protection will kick in and the check will be covered. Typically linked to a savings account or credit card, there is a fee for this service.
  • Keep your account balanced. Always read your account statements (or log in to online/mobile banking) and compare your balance with what the financial institution says you have. If there is an item on your statement that is not listed in your check register, first determine if it is accurate. You may have forgotten to record something. If the item is correct, write it in your check register. But if you believe the item is wrong, contact your financial institution to have it investigated immediately.
  • Use your ATM/debit card wisely. When you open your checking account, you may be issued either an ATM card or a debit card. There are differences between the two. You can use an ATM card to withdraw cash, make deposits, transfer money between accounts, obtain your balance, etc., without having to speak with a teller. Debit cards can be used at a store or restaurant as well as the ATM. It may look like a credit card, but it is not; money is automatically deducted from your checking account when you use it. Whichever card you have, be careful where you keep it and how you use it. Memorize your personal identification number (PIN), never share your card, and contact your financial institution immediately if it is lost or stolen.


Managing your accounts well is important. If you do, you will you be prepared for surprise expenses, future goals and you won’t waste the paycheck you worked for on checking account mistakes. By having the checking and savings basics down, you’ll be better prepared when it comes time to apply for a credit card or invest.

If you want to learn a bit more about managing money, check out our fun, free training videos. Still unsure about all the terminology? Keep this guide to money lingo handy. Learn more about our accounts for teens and young adults.