Compare Junior, Youth & Tertiary Banking Accounts

What is a youth banking account? What is a junior banking account?

A junior bank account or youth bank account is a bank account designed for young people up to a certain age, which usually doesn’t charge any account-keeping fees.

If you want to save for something special, you’ll want a savings account. If you want to access your money with lots of purchases, you’ll want a transaction account.

Youth banking accounts usually come in slightly different packaging for two different age groups:

• Juniors under 12
• Youth under 18

Juniors and Youth are both learning about how to manage money, but they each use their money for different things, so they have different banking needs. So it makes sense that we look at each of them separately.

Once you turn 13, you can usually operate your own bank account without needing your parent to open it for you, but your parent will often still need to sign a guarantee of indemnity.

According to a Cartoon Network survey in 2015 of 520 children aged 4 to 14, the average Kiwi kid is receiving $4.90 per week in pocket money. A Westpac survey in 2013 showed that 45% of children with pocket money save some of their money each week. Kids should expect to do around 2 hours a week on chores in order to earn their pocket money – and the most common chores are cleaning their bedroom, doing the dishes, and doing the laundry.

But it’s getting harder for kids to deal with “digital” money, since they now spend most of their money using EFTPOS, or debit cards, or shopping online instead of using cash. 37% of children surveyed by Westpac didn’t really understand how money is used to pay for things.

This is why it’s so important that Junior Savers save up to buy things using their own pocket money, rather than asking Mum or Dad for money.

As the leaders of the future, our kids deserve to fully understand how to manage their money and make the most of it. Here at Canstar, we encourage banks to make it fun to learn about money for both Junior and Youth customers. Every year, we give the Junior Banking and Youth Banking Awards to the banks or financial institutions that offer the most outstanding value in junior and youth bank accounts.

Who is eligible for a junior or youth banking account?

Some banks offer youth banking accounts to different age groups – some to Juniors and Youths under 18; some just to Juniors under 12; and some to a specific age range in the middle.

What about if you’re finished high school?

Many banks have youth banking accounts that kids can keep right up until they are 21 or 25 years old, for people who are studying full-time at university, an apprenticeship, or a traineeship. Some of this guide will apply to these tertiary students as well as to Juniors and Youth, but our Savings Account, Transaction Account, and Budgeting & Saving sections would probably be more useful to them.

What to look for in a junior or youth bank account:

There are a few basic features to look for in a Junior Saver or Junior Transactor account, depending on your personal situation:

1. High interest rate (beware of high introductory rates that return to lower rates after a time)
2. No account-keeping fees
3. Maximum number of free transactions (purchases)
4. Minimum deposit amounts you can afford to make
5. Online banking available
6. Online education tools for learning about how to manage your money
7. A School Banking program if you’re under 12
8. Low or no fees on other account features such as ATM withdrawals
9. A branch and an ATM near you for when you need it
10. Account personalisation options, so that you can set up sub-accounts for your savings goals

Junior Savers (under 12s) are born when parents help them to build their own money-handling skills instead of just handling money for them. Having their own bank account can help to teach kids how to deposit and withdraw their pocket money, and how to grow their savings. Ideally, kids need a high interest rate so they can see their money growing, and no account fees, so that their savings are protected.

When it comes to Youth Savers (under 18s), saving is still important – because the financial goals are now bigger – but their account ideally needs to also have a good number of free transactions. Accounts need to come with online banking and an ATM card or debit card.

A debit card lets kids make purchases and withdraw cash at ATMs, and you can only spend up to the amount of money that you have deposited into your account. Most banks require you to be a certain age before adding a debit card to your account (e.g. with ASB Bank, you have to be 13 years old).

Interest rates on youth banking accounts:

The Reserve Bank of New Zealand has lowered our official cash rate again recently, so it’s worth keeping a regular eye on the interest rate that you are receiving on your savings.

Kids can also earn bonus interest if they stick to the conditions required by certain savings accounts. But they usually have to deposit a certain amount into your account each month, and make no withdrawals or only a few withdrawals. It definitely pays to check the terms and conditions before you just automatically pick the account with the highest interest rate. If you’re not sure you can meet the conditions, you might be better off with a savings or transaction account with a base rate.

Common fees on youth banking accounts:

Some common fees to look out for on youth savings or transaction accounts include:

• Monthly account-keeping fees
• Branch deposit fees
• Over-the-counter withdrawal fees
• Eftpos fees
• Electronic/online transaction fees
• ATM withdrawal fees, from both “own” and “other” branded ATMs

The good news is that most youth banking accounts do not charge account-keeping fees, and many more will waive their monthly account-keeping fee if you deposit a certain amount each month. This fee can be quite small – as low as $5 with some institutions.

How to make your first budget:

It might not seem like the most thrilling of tasks, but writing your own budget from scratch is the most important thing you’ll ever learn when it comes to managing your money.

In fact, you’ll probably end up writing lots of budgets for yourself through the course of your life, from saving your pocket money for a remote-controlled car, to saving your part-time job wages for a real car.

To help you, Sorted.org.nz has some great tools you can use to make your budget, like the Money Planner Budget Calculator, the Savings Calculator. If you don’t know how much you spend each week, write down a “spending diary” to track what you spend for a month before you write your budget.

Here’s a basic list of things to include in your budget:

1. Income: Everything you earn each week, whether it’s pocket money or part-time job wages.
2. Expenses:
   1. Fixed regular expenses (things you need): All the purchases that you make regularly every week, where the amount of money you spend is generally the same each time. Good examples are tuckshop/canteen money if you usually buy your school lunches once or twice a week, sports club membership fees, and mobile phone credit. If you already have a bank account, go through your most recent statements and write into your budget everything that you actually spend every week.
   2. Other expenses (things you want): Any purchases you make by choice, including clothes, extra food or snacks, toys, music downloads, going to the movies or the footy, make-up, or gifts for your family and friends. Obviously you should make sure you save some money to do fun things like this – but you can choose how often and how much you spend on these things.
   3. Savings goals: You might want to save money up to make a large purchase, such as a giant LEGO set, a concert ticket, or a car. To save money for this, you will need to set aside a certain amount of your income each week and not spend that money. You might want to consider putting these savings into a separate moneybox or a sub-account within your bank account.
   4. Annual and monthly expenses: There are some things that we only pay for once a year, or once a month, and these also need to go in the budget. The easiest way to make sure you budget for these items is to call them a savings goal, and save a little bit of money each week so that you can afford to pay for them when you need to pay them. Divide the amount into little chunks so you can work out how many weeks you will need to save for, and how much you will need to put aside towards that goal every week.
3. The bottom line: At the bottom of your budget, you should add up the total of your expenses and your weekly contribution to your savings goals, then subtract that total from your income. If the number is positive (e.g. $2), well done! You have a budget that will allow you to “live within your means”, meaning you are spending less than you earn. If the number is negative (e.g. -$5), then there is a problem, because it means you are spending more money than you have. You will need to reconsider some of your expenses and rewrite your budget until you know that you can afford to live within it.

How to read your first bank statement:

A statement is a paper or electronic document sent to you from your bank that shows your balance (how much money is left in your account) and your expenses for that month or quarter.

Here are the main things you need to understand on your statement for a savings or transaction account:

• Statement Period: 1 November 2015 – 30 November 2015
  (This statement is only talking about transactions made in the month of November.)
• Acc No: 1111-1111
  (This is your account number.)
• BSB: 111-111
  (This is your bank’s branch identification number. When you give someone like your employer your bank details so that they can pay you, they will need both your account number and your BSB number.)
• Debit Card No: 1111-1111-1111-1111
  (This is your debit or ATM card attached to your account.)
• Daily Limit: $500
  (If you have a debit card, the bank sets a daily limit of how much money you can spend each day. This helps you not to spend all of your money at once.)
• Opening Balance: $1,400
  (At the start of November, you had $1,400 in your account.)
• Closing Balance: $1,450
  (At the end of November, you now have $1,450 in your account. If your closing balance is higher than your opening balance, well done – you have increased your savings!)
• Payments and other credits received: $100
  (In November, the deposits made to your account by you, your family, your employer, and interest from the bank added up to a total of $100.)
• Purchases and other debits: $50
  (In November, the purchases you made using your account added up to $50.)
• Transactions: 10 November Telstra NZ Prepaid       $30
  (A list of all the transactions made in November. They are listed in order by date, with transaction details of people who paid you money and people you paid money to, and the amount paid. Check every statement to make sure every transaction has been recorded correctly.)

You should always, always, always read every statement you get from your bank so that you know if something is not right in the statement. Then you can make a complaint and ask them to fix it.

Here are some things you should always check on your statement:

• Is my name spelled correctly? Is my address listed correctly?
• Are all the transactions correct? Do I recognise all of them and remember what they were for? Is the amount incorrect for any of the transactions, when I check them against the receipts I got when I made those payments?
• Did I receive interest (if I did everything I needed to do in order to earn interest, i.e. made deposits, etc.)?
• Are all the deposits that I made this month listed with the correct amount and on the correct date?
• Have I been charged any fees that I do not think are correct?

A common example of something you would need to call your bank to fix is incorrectly charged fees. If the bank has accidentally charged you two lots of ATM fees for making one ATM withdrawal, you will see it on the statement. You can phone the bank and ask them to give you back the money for one of the ATM fees.

If something is not right in your statement and your bank does not fix it after you’ve asked them to, you can make a complaint to the free Banking Ombudsman of New Zealand.

Some savings tips for Juniors and Youth:

Savings tips for Juniors:

• Make a budget! If you know how much pocket money you earn each week, you can work out how many weeks you will have to save your money and not spend it if you want to buy something expensive.
• You can usually earn pocket money by doing chores around the house. Ask your parents what chores they would like for you to do, and how much they will pay you every week if you do those chores.
• There is a big difference between things you need and things you want. You need to save up patiently and make choices about what you will spend your money on – needs or wants.
• Compare the prices of different items before you choose which item you will buy.
• You don’t need to buy your lunch at the tuckshop or canteen every day.

Savings tips for Youth:

• Make a budget!
• It is better to use cash or debit for purchases instead of credit. Credit means you owe other people money and you have to pay them back with interest added on top.
• It is good to have savings set aside in case a money emergency comes up.
• If you have a part-time job, check every single payslip you get, to make sure you are being paid the correct amount for the correct number of hours. Also check that you are paying the correct amount of tax and that your employer is contributing to a KiwiSaver fund for you. Here is a bunch of other stuff you need to know when you start your first job.
• Keep track of how much data and credit you’ve used on your mobile phone, so that you don’t spend all of your prepaid credit or go over your plan’s cap.
• You don’t need to buy afternoon tea at the local hang-out every day – you can hang out with your friends without spending money.
• Look around for the cheapest price and the best value deal before you purchase anything.
• Shopping lists aren’t just for groceries. Make a shopping list before you go out, so that you don’t make impulse buys and spend more money than you wanted to.
• Wait 30 days before making any purchase more expensive than $20. That way, you know whether you really want or need it, because after 30 days you’ll either still be into it or you’ll have forgotten about it.
• Fashion changes constantly. Don’t bother trying to buy clothes for every new trend – just buy a few things that fit you comfortably and make you feel like yourself and confident.
• If you accidentally pop a button on your jeans, don’t just go shopping for a replacement. Get out a needle and thread, or ask your parents to show you how to fix it. It’s a priceless life skill.
• Meet your friends at each other’s houses. If you meet at the shops, you will be tempted to spend money on things you don’t need. It’s that simple.
• Choose free over paying when it comes to entertainment. Go to a free concert instead of Taylor Swift. Hold a TVNZ On Demand or Netflix movie night instead of going to the movie cinemas.
• When buying gifts for family and friends, planning ahead and shopping during sales can save heaps of money. Buying at the last minute always costs more. And remember – it’s not a cliche; handmade gifts and cards really do mean more.
• Drink water. It’s free to refill your own water bottle everywhere you go, and it’s super healthy because it’s nature’s number one cleanser and rehydrater. It’s getting ridiculously expensive to buy other drinks like bottled water, juice, soft drink, or energy drinks.
• If you like to go shopping when you’re stressed, try doing something else to relax. Go for a walk. Meditate or pray. If the urge to window shop is too much, then do it safely: Read blogs about the type of fashion you’re into, and Pinterest the things you’re interested in.

Money-wasting traps to watch out for:

• Mobile phones: If you go over your plan by using too much data or sending too many texts, your mobile phone bill will be very expensive. When you’re young, it is a lot easier to stick to a pre-paid mobile phone, so you can’t spend more than the credit you load onto your phone.
• Eating out: When you and your friends go hang out at Macca’s after school every day, it can be tempting to spend money every time you go there. But you don’t have to buy anything unless you are actually hungry and you know dinner won’t be for a while. A cheaper option is to pack an extra apple for those post-school-pre-dinner munchies.
• Buying online: When you buy something online, it’s harder to remember that you’re spending money because the money is invisible. If you want to buy something online, always check your bank balance using online banking first, and check your budget as well, so that you know whether you can afford it. (Remember to log out of online banking before making the purchase, so you don’t accidentally let a hacker take your money.)
• Bank fees: As a young person, you should not have to pay monthly account-keeping fees on your account, because you probably aren’t earning a whole stack of money. There are some fees that you probably will have to pay, like the fee if you use the wrong bank’s ATM instead of your own bank’s ATM. But these fees should be fairly small.

Our biggest “money trap” to watch out for would have to be online scams. You can find our best tips for staying safe online and keeping your account information confidential on our Online Banking page.

Here are the best tips from NetSafe‘s recent Smartphone Security Report:

1. Lock your smartphone with a pin number, password, or complex swipe pattern.
2. Install anti-virus software on your phone.
3. Keep the operating system on your phone up-to-date to protect against new threats.
4. Be super cautious about what apps you install.
5. “Jailbreak” your device at your own risk.
6. Backup your device and the data stored on it to a cloud system.
7. Don’t use free public Wi-Fi if you can help it.
8. Don’t click on links or open attachments you weren’t expecting.
9. Don’t share your smartphone with other people.
10. Pay attention if your smartphone starts behaving oddly or looks like it might have a virus.
11. Securely erase your personal information before reselling or recycling. This usually means hitting the Factory Reset button on your phone.

School Banking runs all the way through primary school, and some programs continue into middle school and high school. You usually get a passbook where you keep track of money getting put in and taken out of your account, and you use deposit envelopes to put money into your account. There are usually rewards when you reach certain amounts in savings. Lots of the programs have funny characters who teach you about how you can manage your money and save for the things you want.

Your school also benefits from School Banking because they usually receive a certain amount from the bank for each student who opens an account and for each deposit made by students.

Even your parents benefit from School Banking, because it means they don’t have to schedule regular trips for you to visit a branch to deposit your pocket money into your account.

School Banking in New Zealand first began back in 1926 with ASB Bank, and they had a monopoly on children’s money for a long time. At the time of writing, there are just a few banks in New Zealand that offer School Banking programs, including:

• ANZ
• ASB Bank

But if you’re not with one of these, you should definitely ask your bank if they are thinking of starting a School Banking program!

Please note that these are a general explanation of the meaning of terms used in relation to youth banking accounts. Your bank or financial institution may use different terms, and you should read your product disclosure statement (PDS) carefully to understand everything that may apply to your account. You cannot rely on these terms in relation to any account you may open.

Account-keeping fees: An ongoing fee charged to cover the bank’s costs of creating and maintaining the account. Look for a good youth banking account that does not charge an account-keeping fee.

Annual equivalent rate (AER): A rate that can be compared between lenders, which shows what compound interest rate would be paid once each year. Savings accounts must advertise their AER so that you can compare the interest you could actually expect to receive from the different accounts on offer.

On-call: “On-call” or “at call” transaction or savings accounts allow you to immediately withdraw your money from the account whenever you like. This is different to other types of savings accounts, where you have to leave your money in the account for a certain amount of time if you want to earn interest.

ATM (Automatic Teller Machine): A machine found in public places or at bank branches, which allows you to withdraw cash from your account. ATMs are usually on 24/7 so that you can use them any time you need cash.

Balance: The amount of money currently in your bank account.

Banking Ombudsman: If you have a dispute with your bank and have not been able to resolve it through the bank’s internal complaints resolution process, you can contact the Banking Ombudsman of New Zealand. It is a free and independent service that helps people resolve disputes with their financial institution.

Basis points: A financial unit of measurement that describes the percentage change in interest rates or the value of a financial product. One basis point is 0.01% or 0.0001 in decimal form.

Bonus savings account: Accounts that give you bonus interest if you deposit a certain amount of money into the account (usually around $50 or $100) and you don’t make any withdrawals in that month.

Branch: The physical building where your bank or financial institution does its business. Branches are only open during normal working hours.

Cash: Money in the physical form of notes and coins.

Cheque account or checking account: A transaction account that allows you to make purchases with your own money by writing a cheque. If you do not have enough money in your account when the other person cashes your cheque into their own account, the cheque will “bounce”, meaning it is not paid and you may be charged a penalty fee.

Compound interest: Compound interest is when interest is calculated on the entire balance of your account, not just the initial amount you deposited when you opened the account. This means that every year, if you don’t withdraw your balance, you will be earning more interest because the balance of the account is getting bigger. All savings accounts should use compound interest.

Consumer: Someone who buys and uses products or services.

Credit card: A card that gives the account holder access to a line of credit, similar to a personal loan. You can spend up to a specified credit limit, but the money must be repaid, otherwise you start paying interest on the balance of the card (whatever you have spent). We do not recommend that youth banking account holders apply for a credit card, because having one can tempt you to go on shopping sprees or to spend more money than you have. When you are young and have a limited income, a debit card is a more sensible choice.

Debit card: A card that is linked to a transaction account and allows the cardholder to make purchases at stores and online, and make cash withdrawals from an ATM. Also known as a bank card or cheque card. This is the type of card we recommend for all youth banking account holders.

Deposit: Money that you put into your bank account.

Direct deposit: When a transaction is automatically removed from an account and received into a different person’s account. For example, you might have a direct debit set up to top-up a prepaid mobile phone or pay a mobile phone plan bill every month.

EFTPOS (Electronic Funds Transfer at Point of Sale): A payment system where you use your debit card to make payment for goods or services, or to withdraw cash. EFTPOS machines are used to process these payments at shops.

Electronic banking: A broad term used to refer to the banking system where you use online banking, telephone banking, ATMs, or EFTPOS to access your account. You can use electronic banking to make withdrawals or other payments, deposits, or transfers.

GST (Goods and Services Tax): The New Zealand tax levy on payments for goods and services.

Income: Money you earn, including hourly wages, salary, interest on your bank account balance, and government benefits such as Student Allowance.

Inflation: The percentage by which the price of goods and services rises each year across the country.

Introductory rate: A promotional, introductory bonus offered by many savings accounts, where you get a higher interest rate to grow your savings for a set period of time. At the end of the introductory bonus period, the interest rate will return to your normal base rate. An introductory rate is a type of promotional rate (see below).

Junior savings account: Savings accounts for children, usually aged 12 and under. A parent or guardian usually operates the account in the child’s name until they reach legal age, but the child also has access to their account.

Junior transaction account: Transaction accounts for children, usually aged 12 and under. A parent or guardian operates the account in the child’s name until they reach legal age, but the child also has access to their account.

Online savings account (OSA): A savings account that is managed primarily over the internet using online banking.

Pay Anyone: A payment system where you can transfer money to any individual or organisation using online or phone banking, as long as you have their account name and number, and their BSB number.

Promotional rate: A higher interest rate which is only offered during a specified promotional period. When the promotional period ends, the interest rate will generally return to the normal base rate.

Reserve Bank of New Zealand (RBNZ): The Reserve Bank is the central bank of New Zealand, and they are responsible for setting the official cash rate. They manage monetary policies such as the official cash rate to stabilise inflation and the economy; maintain a sound and efficient financial system; and supply our national banknotes and coins.

Savings account: Bank accounts that pay interest to the account holder and cannot be used to make transactions. They can be linked to transaction accounts so that you can transfer money from your savings to your transaction account when you have to make a big purchase.

Term deposits: An account with a financial institution where you deposit some money for a set period of time (the “term”) and you receive interest on that money at the end of the term. The interest rate is usually a fixed rate that doesn’t change over the term of the deposit. Term deposits usually give you a higher interest rate than a transaction account, but are not always higher than a high interest savings account. Fees are charged if you withdraw your money before the end of the term. Term deposits are also known as fixed deposits.

Transaction: The movement of money in or out of your account, including deposits, withdrawals, and transfers between bank accounts.

Transaction account: A deposit account that gives you frequent access to your money for transactions. You can use a debit card attached to the account to make EFTPOS transactions at the shops and online, to pay your phone bill, and to withdraw cash at ATMs or at a bank branch. You can also use your transaction account to write cheques when you need to.

Transfer: When you give the bank instructions to move money from one account to another account, e.g. moving money from your savings account to your transaction account. This is different to a “payment” where you send money from your account to somebody else’s account.

Withdrawal: When instructions are carried out to pay money out of your account and it is paid. A simple example is getting cash out of an ATM.

Our Ratings & Guides

Junior Banking and Youth Banking Awards Report

Budgeting & Saving Money

Checklists

What to look for in a youth account

Some questions every teen should ask when choosing a bank

Articles and Guides

Interest rates and fees on Junior and Youth bank accounts

Mobile apps to teach your kids about money

Dealing with money for Juniors – Under 12s:

Some $ things to teach your Under 12s

What is School Banking?

10 ways to slash the cost of child care

School costs: how to save

What to do with the tooth fairy?

Helping kids with delayed gratification

Dealing with money for Youth and Students – Under 18s and New Graduates:

Some $ things to teach your teens

How to find a holiday job

Leaving school? Here are some money things you need to know

Money hacks for smart students

10 ways to earn more this financial year

A guide to moving out…

Who offers youth banking accounts in New Zealand?

For more information on how Canstar rates youth banking accounts, read our latest Junior Banking and Youth Banking Awards report. These are the providers we have recently researched and rated:

1. ANZ Bank: ANZ offers bank accounts for juniors under 12 and youth under 21, as well as a school banking program and educational workshops for kids and youth. Nearly 1 in 2 New Zealanders has one or more banking products with an ANZ brand, and they are our country’s largest rural banker, having been founded way back in 1835.
2. ASB Bank: ASB Bank offers bank accounts for juniors under 12 and youth under 21, as well as running New Zealand’s first school banking program, which they started back in 1926 and which continues to be popular today. ASB also runs GetWise educational workshops for kids and youth, and have YouTube videos to teach youth money skills. Clever Kash is ASB’s latest brain-child, a physical moneybox that deals with digital money online through a smartphone app. ASB opened in 1847 with the oath to serve the community, to grow, and to help Kiwis grow, and today more than 1.3 million customers bank with ASB.
3. BNZ (Bank of New Zealand): BNZ offers bank accounts for students of all ages and runs educational workshops for kids and youth. BNZ opened in 1861 and they were the first bank to become carbon neutral, as well as being one of New Zealand’s largest Fairtrade workplaces.
4. Kiwibank: Kiwibank offers bank accounts designed for juniors and youth, with different accounts and features becoming available at ages 7, 10, 13, and 15. Kiwibank was founded in 2002 in an effort to keep New Zealanders’ money in New Zealand, and they remain 100% Kiwi-owned today. They now have more than 800,000 customers and you can find them in NZ Post shops.
5. SBS Bank: SBS Bank was founded in 1869 as the Southland Building, Land and Investment Society. They have remained independent and 100% customer-owned ever since, with members voting against being bought out by the big banks.
6. Westpac NZ: Westpac offers bank accounts for juniors under 12, teens between 12-15, and youths under 19. They also have a school banking program and run educational workshops for kids and youth. Their latest invention is the Cash Critter mobile app, which is a fun, interactive way for kids to learn about money. They also have educational games on their Hector’s World website where child customers can log on to learn about money. Westpac was established in 1817 as the Bank of New South Wales, and Westpac New Zealand was later established in 1861.