Teen banking

The ultimate guide to banking for teens

Teenager using Copper Banking phone app

Banking. It may seem as relevant to you as health insurance, jury duty or saving for retirement (although it’s never too early to start!). Not something you have to worry about in this stage of life, right? Wrong. Not only does financial literacy set you up for future success (munny, hunny), it’s your ticket to financial independence.

Get started now and you’ll be way ahead of the curve when you hit your 20s. Plus, admit it. You’re a little old to be chucking your side-hustle earnings into that shoebox under the bed.

We’ll cover the fundamentals of banking, like how banks work, the differences between checking and savings accounts, how to write a check, and what a debit card is, to name a few. Armed with all this knowledge, you’ll have the smarts and confidence you need to embark on your financial journey.

First things first, you’ll need a refresher on what a bank is, because we’ll be talking about it a lot in this guide.

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What is a bank?

A bank is a financial institution that stores and lends money. Banking refers to the activities the bank conducts, like opening and managing people’s accounts, supplying checks, issuing debit and credit cards, or distributing personal or business loans. Banks can also perform other services such as wiring money, advising clients on investments, and exchanging currencies.

It’s probably no surprise that banks don’t hold your money out of the goodness of their hearts, erm, vaults, though that would be nice. They are for-profit businesses owned by investors and shareholders.

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How do banks work?

One of the main ways a bank turns a profit is to lend out money in the form of loans or credit cards. Banks charge higher interest rates on these products than the interest they pay on their clients’ bank accounts. In other words, they will take money from a bunch of their clients’ savings accounts, use it to issue loans to borrowers with hefty interest rates, and then pay small amounts of interest back to the clients in exchange for leaving their money in the bank.

Copper is a little unique, in that we’re a mobile banking service partnering with a traditional bank. Copper helps you open a bank account, easily exchange money with your parents, and start saving your earnings. We make our money differently than a lot of other banks, too. We charge fees to vendors who run our debit cards. We don't charge our users any monthly fees, overdraft fees, or maintenance fees, unlike most banks. A pretty good deal, if we say so ourselves.


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What types of banks are there?

Banks can be sorted based on many different criteria. You can categorize them by the technical services they provide (retail vs. investment banks) or by their size and scope (national banks vs. regional banks). But the broadest division in banking lies between the forms of traditional and online banking.

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Traditional banking involves banks with physical branches that you can visit in person. They typically offer more services than their online counterparts, but charge higher fees so they can pay operational overhead costs, such as keeping the lights on at all their branches and paying bank tellers.

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Online banking skips the middle man and conducts all its business on the internet. Because online banks don’t have to operate physical locations, they can offer higher interest on their savings, very low minimum balance requirements, 24/7 access to banking features, and little to no hidden fees. Online banking has taken off in recent years and, unlike other fads, isn’t going anywhere soon.

Copper doesn’t generally play favorites, but when we started out, we couldn’t deny online banking for teens was a vastly superior choice, for all the reasons listed above, especially ease of access and lower costs. We’re partial to the online banking model and hope you will be, too.

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Can teenagers have bank accounts?

Absolutely! You don’t have to be old to take control of your money. Other banks need you to be at least 18 years old to open an account, but at Copper we help you open a bank account at any age. All you need is a parent or guardian to sign up with you - did someone say duet?

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How do you open a bank account?

In the olden days, a.k.a. 10 years ago, people had to hop on their bikes, or drive their cars to a bank and fill out all the required forms, you guessed it, IRL.

With Copper, opening a bank account is as easy as downloading our app, filling out some personal info, getting your parents to do the same, and hitting ‘Submit’. In a matter of minutes, voila! You’ve got a bank account.

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What’s the difference between a checking and savings account?

Checking accounts hold money that you intend to spend, and are usually connected to a debit card and/or a checkbook (paper checks). Savings accounts are for saving money so they won’t come with a checkbook, but may be connected to an ATM card so you can withdraw funds at the ATM. It all boils down to whether you wanna stash your dough or spend it.

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If you want to spend it, opt for a checking account. Checking accounts are deposit accounts commonly used for everyday spending. They don’t have withdrawal limits and are linked to debit cards. Checking accounts give you a glimpse into your short-term spending habits, which are helpful when creating a budget. They don’t gather any compound interest, though, so if you’re saving up for the latest iPhone or spring break trip, you might want to consider a savings account, instead.

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Savings accounts are deposit accounts that store money and earn compound interest. Savings accounts often have withdrawal limits, which means if you take out more than the specified amount, you’ll have to pay a penalty fee. It may sound harsh, but they’re set up this way to help you resist any impulsive itch you might get to withdraw your money and blow it all on one thing.

Which account works best for you? Download Copper and you won't have to choose. We offer both checking and savings accounts, so you can track your spending and save your money, all in one place.

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How do I write a check?

Now that you have your bank accounts up and running, you can deposit money and checks into it. A check is a written slip that gives your bank permission to remove a set amount of money from your account and give it to someone else. People often use checks to make large payments, since there are usually limits on how much they can send electronically.

The Cliffnotes version of filling out a check is to input the date, the name of the person or company you’re paying, the amount you’re paying in numeric and written form, a summary of what you’re paying for, and your signature.

Below are the fields you’ll see on a check and examples of what to fill in beside them.

How to write a check
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What’s the difference between a credit card and debit card?

On the surface, a debit card and credit card look the same. They’re both thin plastic rectangles with numbers and words etched onto them. As similar as they are, not understanding the difference between debit and credit cards can land you in a heap of financial trouble!

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A debit card is a form of payment linked directly to a checking account that is used in place of cash. With a debit card, you can only spend what you have in your account.

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A credit card, on the other hand, is linked to an account that offers a line of credit from a bank. This means that cardholders can borrow more funds than what is available in their bank account at that time, and pay it off later (usually with high interest rates).

When you sign up for Copper you are issued a debit card. You, or your parents, can add money to your account balance that you are then able to spend. Copper doesn't have overdraft or hidden fees like some debit and credit cards have. And, perhaps most importantly, you won't be charged interest.

And, That’s a Wrap…

Banking may seem old and stuffy, like your dad’s music taste, but we hope by now you get how relevant it is at any stage (and age) in the game. Get in now and you’ll be that much closer to financial success, not to mention independence. Prove to your parents, and yourself, that you can handle your money like a boss. So, instead of scrolling through your TikTok feed for the next three minutes, download our app, answer a few questions, and open a bank account with Copper. It’s that simple.

Here’s to making the most of your money.

More ultimate guides

Teen banking is a big topic. There's just too much to cover in detail on one page. Dive deeper with some of our other Ultimate Guides to Financial Literacy.

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