Banking 101 for Teens: Bank Fees

Bank of America allows teens to open checking and savings accounts at age 16. This is a great idea, in theory, to promote a greater understanding of the financial practices of banks and money management skills that are necessary later in life. If the bank's policy isn't explained to the teen in detail, the lessons can be costly and frustrating. This is a lesson my son learned when he opened a checking and savings account after he got his first after-school job at age 16.

Checking Accounts

Bank of America's Campus Edge checking account is great for teens learning to budget their money. The account has no monthly fees, and even allows a one-time reimbursement of an overdraft (non-sufficient funds or NSF) fee should they need it. Teens need to understand some of the pitfalls that can cause overdrafts to happen in the first place.

1. Monthly maintenance fees. Though tough competition has many banks offering free checking accounts, many banks still charge monthly maintenance fees. These fees can be assessed as a set monthly amount, a per check charge for each check you write over a predetermined number, or a fee that is assessed if your balance drops below a certain amount.

2. Cut-off time for deposits. Nearly all banks have a "cut-off time." Any deposits made after this time (usually about 2 p.m.) will not be credited until the next business day. If you make a deposit at 2:30 p.m. on Friday, your money will not be available until Monday. This means if you use your debit card over the weekend, you may have one or more overdraft fees come Monday morning. To be sure, ask the teller when making the deposit if the money will be available immediately. If not, try getting some cash back from your deposit and paying cash for your purchases over the weekend.