The school of savings: Opening your child’s first bank account is step one toward financial literacy

With the Canadian National Exhibition launched as the official countdown to back-to-school, your kids might have asked for a little extra money to buy outrageous snacks at The Ex or a new wardrobe to impress on the Midway.
Some kids are also eager to have their own bank accounts, the perfect moment for parents to talk with their children about money, experts say.
There’s no right age to open a bank account for your child. In Canada, a parent or legal guardian typically needs to authorize opening a bank account if the child is under 12, according to Embark Student Corp., a Mississauga-based education savings and planning company.
That said, requirements for opening a bank account as a minor vary by province and financial institution. Jason Heath, managing director at Objective Financial Partners in Toronto, says a parent usually needs to be involved until the minor reaches the age of majority.
Certified financial planner Brenda Hiscock’s son was eight when she opened his account.
“I decided that he was old enough when he started to (earn money from chores) and wasn’t sure how he could use that to get the things he wanted,” says Hiscock, who also works at Certified Objective Partners in Toronto. “So, I thought a bank account would be a good way for him to work towards those goals.”
When shopping around for an account, both Heath and Hiscock say parents should seek one with little to no account fees, and to check the fine print for hidden transaction fees.
“There are usually no transaction fees on the first couple of withdrawals or debit purchases, for example,” says Heath. “But the fees can add up, so I think it’s just a matter of figuring out how a child will use the account and then looking at the fee structure of the account.”
Making at least some money on your money is also a valuable lesson for children.
“It’s nice to find a bank account that pays some kind of interest on the account, which can be difficult to do with a bank account, but some out there pay a little bit of interest,” Hiscock adds. Scotiabank’s Getting There Savings Account pays 0.05 per cent interest on deposits under $500 and 0.50 per cent on deposits greater than that.
While parents might be wary about opening a bank account for their young child, there are benefits.
For one, it can instill financial literacy skills — like budgeting — that your children can use as they become adults.  Hiscock says opening a bank account and debit card for her son early on taught him how to save and spend money responsibly.
She even encouraged her then-young son to set goals: a video game for the short term and a bike for the long term.
Hiscock says that the important part of opening a bank account for your child or teen is showing them the rewards of putting money aside.
She adds that it’s just as important to show kids that some mad money should be built into the equation. 
“Some parents will want them to save every single dime, and I find that kids do better if a little portion has some freedom.”
Maybe for that deep-fried Mars bar at the Ex?