Child account comparison
What is a child account?
A children’s account is either a checking account on a credit basis or a kind of savings book. Most accounts of this type are also known as pocket money accounts. On this page you will find current accounts for young people and children under the age of 18. In contrast to the classic current account, the child account or pocket money account is only kept in the credit. One then speaks of a credit account. An overdraft is usually not possible. There is also no overdraft facility or overdraft facility.
At what age can the child account be opened??
Child and youth accounts are aimed at young people up to the age of 17. On average, these accounts can be opened at many banks for children from the age of 7. Older young people who start an apprenticeship, do voluntary service or study find suitable offers in the student account comparison.
How is a child and youth account opened?
The account opening must be legitimized by the legal representative (both parents). Children themselves can only open the account if the guardian agrees. Official documents or birth certificates are accepted as proof of guardianship. The same applies to young people in training. Exception: The child is in an employment relationship. In this case, the authorization to open an employment relationship also means that you have opened a current account.
Which orders may be made and to what extent?
Parents can give their basic consent for certain businesses. Within this framework, transfers (also online), payment with a Girocard or cash withdrawals are possible to a certain extent. If, for example, the issuing of a bank card is approved when the youth account is opened, the consent to self-sufficiency with cash is given at the same time.
The so-called pocket money paragraph (§ 110 BGB) regulates transfers and payments by minors. According to the law, a contract is concluded even without the consent of the legal representative if the child or adolescent is provided with the money that is freely available to him (pocket money), the contractual performance. An example of this is the purchase of a portion of ice cream on the way to school.
Credit transactions, i.e. the overdrafting of an account or the use of an overdraft facility, are only legally effective if approved by a guardianship court. However, parents should ask themselves whether it really makes sense and is necessary to give the child this freedom. After all, it should learn to get by with the money that is available to him.
Which account cards are issued for an allowance account?
A youth card usually also includes a bank card. With it, the child can withdraw cash from the machine and pay in shops if the parents allow it. A credit card is only issued as a prepaid card, if at all. With a prepaid card, the account holder only has the balance in the bank account. There is no credit line like classic credit cards.
Which tax regulations have to be observed?
Interest in child and youth accounts, as a checking account or in a bank account, is still very common. Taxes must also be paid for profits and income on investments in overnight money, fixed deposits, savings certificates, funds or shares. Income is subject to withholding tax or capital gains tax. 25% of the income plus solidarity surcharge is currently payable. However, you can avoid this payment by placing an exemption order for the child and pocket money account. Your child will also receive an amount of € 801 annually for tax-free interest income or other income from investments.
Tip: Don’t miss out on this tax benefit. By the way, you can split the allowance of € 801 in any calendar year across all of your children’s accounts.
When is the right time to open a child or youth account?
You have to answer the question of the right time for a child account yourself. In most banks, opening an account is only possible from the age of 7 anyway. Is your child already used to dealing with money? Are you spending your pocket money responsibly? Then it is certainly not too early for your own bank account.
What should I look for in a good children’s account??
The following criteria are important for a good checking account for schoolchildren and young people:
- free account management with no hidden costs
- free transfers
- free Girocard
- ATMs near your home for free cash withdrawals
- optional a free credit card
- optional interest on the credit
Which bank offers the best child account?
Deutsche Bank currently has the best offer in our child account comparison with the Deutsche Bank Young Account. It is free until the age of 30. With the free Girocard, your child can withdraw cash free of charge from Deutsche Bank machines and partner banks worldwide. For 18 euros per year, there is an optional prepaid credit card from Mastercard from 7 years. Free transfers are free of charge via online banking, telephone banking, in the branches and via the app.
Can I open the youth account in the name of my child?
Yes, the current account is in your child’s name as long as all legal guardians agree to open the account. However, due to the child’s limited legal capacity, both parents can make deposits and withdrawals themselves until the child is of legal age.
There is interest on the pocket money account for children?
Yes, some checking accounts for children still come with interest. This is usually between 0.10 and 1.00%. The interest income is low, however, so that interest is not a decisive criterion when choosing a child’s account. With an average balance of 200 euros on your pocket money account, with your average interest rate of 0.60%, this makes just 1.20 euros interest per year.
Is it possible to overdraw a youth account?
Basically no. Banks are not allowed to grant overdraft facilities to children and adolescents, which is why overdrafting is excluded. A current account for children can only be held in the balance and cannot go into the red.
However, it can still happen that there is an unwanted overdraft. This is when the young person pays with the Maestro Girocard in the store, there is no confirmation of coverage and only a small amount of money is available in the account. In this case, the payment is successful, but the money cannot be debited due to insufficient funds. There is then a return debit for which fees are incurred. In such a case, contact your bank and the dealer promptly to clarify the situation.
Can I, as a legal guardian, restrict or control the use of my account??
When opening an account, both parents decide how the child should use the account. For example, they determine whether they can have the credit alone and whether they will receive a Girocard and credit card for the youth account. With many banks it is also possible to set a credit limit, i.e. how much money is available each month. As a parent, you are also entitled to dispose of the child up to the age of majority and can also make cash deposits and withdrawals yourself.
What happens to the youth account when the child reaches the age of majority?
The young person has full legal capacity after the age of 18 and can manage the current account on his own. The parents’ power of attorney expires.
However, most child accounts then expire. In this case, the adolescent is usually contacted by the bank and the conversion to an adult account is proposed. Depending on the bank, fees may apply. If your child is completing an apprenticeship or going to university, there are suitable checking accounts for students or trainees.
However, it is also possible that accounts for children exist beyond the age of 18. For example, the Wüstenrot Top Giro young is managed as a youth account up to the age of 24. Inquire in good time up to what age the children’s bank account is and what happens when you are of legal age. Please also take a look at our current account comparison.
There are also savings accounts for children without checking function?
Yes, there are some savings products for children. Many direct banks, such as comdirect, 1822direkt and ING-DiBa, offer overnight allowance accounts for children. However, due to the current low interest rate phase, the interest rate is low. If the money is not supposed to be available on a daily basis, there are also savings bonds that offer a guaranteed interest rate for a predetermined term of usually several years. In addition, almost every bank also offers passbook-like products with higher interest rates especially for young people.
Fund savings plans are also a way to save money over a long period of time and to put them back for old age. Direct banks offer this option for as little as 25 euros a month. Make sure that the fund selection is broad and choose a fully replicating ETF if possible.
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