Your First Account

It’s best to keep your money in an account at a bank or credit union.

You probably keep your money in a jar, plastic bag, or piggy bank. But you can’t take a piggy bank with you wherever you go, and your money might even be lost or stolen. With a bank or credit union account, you won’t have to worry about those things.

Kids often open a special account with a parent or guardian called a joint or custodial account. That means both of you will usually have access to deposit (put in) or withdraw (take out) money.

You’ll most likely choose between a checking and savings account to start with.

Checking Account: This is an account that lets you buy things with a debit card. When you use the debit card to buy something, the money will automatically come out of your account. That means you don’t need to carry cash around.

Savings Account: This account helps you save money and earn interest. Basically, a bank or credit union pays you a small percentage of the money in your account. You earn money without having to do a thing! But, if you want to get money out of the account, you have to go to an ATM or your financial institution.

Opening an account at a bank or credit union is easy. You’ll usually need some money to put in, a parent or guardian, and an ID (such as a social security card or birth certificate). Some banks or credit unions let you sign up online. You may prefer to go into a branch so you can talk to the tellers. They can give you tips for how to get the most out of your new account and you can ask them questions.

Your money is safe in a financial institution because the government insures your money. The FDIC (Federal Deposit Insurance Corp) and the NCUA (National Credit Union Administration) make sure that up to $250,000 per account will be safe—that’s a lot of cash! Basically, the government makes sure you will get your money back even if there’s a natural disaster, a bank robber, or just about anything else you can think of.