Bank accounts for 16 year olds: What you need to know

• Couldn’t I have a bank account before 16?
• Why should I get a bank account for 16 year olds?
• What’s the best bank account for 16 year olds?
• Am I still eligible for a children’s bank account?
• Are there any online bank accounts for 16 year olds?
• How do I open a bank account for 16 year olds?
• Will I get into debt?
• What about e-money and prepaid cards?

Couldn’t I have a bank account before 16?

Yes, of course. Bank accounts for kids and teens are nothing new. Many banks and building societies will let children open current accounts from the age of 11, but you have to be 16 to open one independently – that is, without the signature of the adult who looks after you. Before 16, you’ll also need permission from a parent or guardian to have a debit card with your account. You’ll be able to withdraw money at a cash machine using your debit card, and use it to pay for stuff too.

Why should I get a bank account for 16 year olds?

There are many advantages to a specialist bank account for teenagers. Many are geared up to offer the same facilities as a basic account for adults. That is, you can use a debit card for purchases and withdrawals, and you’ll also be able to receive money directly to your bank account (wages, banks transfers from friends or family etc) and set up automatic payments to cover things like your mobile phone bill.

Some banks will give you interest on your balance. Interest is money that you earn as a percentage of the amount you have deposited in your account. You will also be able to keep track of what’s in the account and move money around online via your bank’s website or app. If your account provider links with the technology, you can also pay with Apple Pay or Google Pay.

The crucial difference between bank accounts for under 18s and those for adults is that you won’t have an overdraft facility, which lets you borrow money through your current account by taking out more than you have in there. That’s because bank accounts for teens have restrictions on lending (you have to be 18 or over to qualify for that). There might also be a limit on how much cash you can withdraw each day.

On the plus side, some of the best bank accounts for 16 years olds offer cool perks, such as discounts on driving lessons.

What’s the best bank account for 16 year olds?

Just as with an adult bank account, the ‘best’ bank account for under 18s will depend on your particular circumstances. At a basic level, you’ll probably want to weed out ones that don’t come with a debit card or offer internet banking.

If there’s a branch locally, that might be a plus point, as could be the ability to upgrade your account to a normal current account once you hit 18, which would avoid the hassle of opening another in a few years’ time. Most banks offer this automatically, but it’s worth checking. When you turn 18 you’ll also become eligible for credit products, including an overdraft. Don’t take it for granted that you’ll just wake up on your 18th birthday and it’ll be there, however. Usually, an overdraft is something you’ll need to discuss with your bank first.

It’s also worth comparing the interest rates (normally shown as AER) when looking for the best bank accounts for teenagers. Read the terms and conditions carefully – some, for example, will only pay interest if you put money into the account each month. Check, too, whether the bank sets any withdrawal limits (daily spending caps restricting the amount that can be taken from a cash machine) or if you’ll need to deposit some money in the account upfront to open it in the first place.

Finally, look for extra features the bank offers. Barclays Young Person’s Account, for example, lets you design your own card using your favourite photo. On the flip side, there’s a 2.75% transaction fee for spending abroad.

Am I still eligible for a children’s bank account?

Yes, you are. Most children’s bank accounts go up to the age of 18 or 19 and offer many of the same features as ones tailored specifically to customers aged over 16. Lloyds’ Under 19s Account lets you choose between a Lloyds Bank Visa debit card with contactless functionality to pay for things in shops and online, or a Cashpoint card, which is only for taking money out of cash machines. You can also earn interest of 0.50% AER on balances between £1 and £999.99.

NatWest’s youth current account is called ‘Adapt'. You’ll be able make purchases and withdraw cash with a contactless Visa Debit Card, check your balance out and about with the mobile banking app, earn 1% interest on your balance and, like most other teen bank accounts, you won't have to pay any set fee to have the account.

Are there any online bank accounts for 16 year olds?

Yes, and if you use your phone a lot, an app-based or mobile bank account might be a good way forward. In recent years, more and more people have been switching to these so-called ‘challenger’ banks, and for good reason, as they offer some tempting technological perks.

Monzo is becoming an especially popular option. Its designated bank account for 16-17 year olds “isn’t just a minimalist version of our [adult] account”, it promises, but almost identical. “The only major difference is we’ve blocked spending for some things which are illegal if you’re under 18, like gambling.” You’ll be able to send and receive money, set up regular payments or repeat payments (often referred to as direct debits), and you’ll receive a debit card. The account also works with Apple Pay and Google Pay.

Online bank Starling does an app-based account for 16 and 17 year olds too. It comes with a MasterCard debit card, lets you earn interest on the money you have in the account, and has loads of handy money management features. These include instant payment alerts, spending insights, and help with your savings goals, whether it’s for clothes, tech or trips. Another nifty trick is that, if you’re sitting right next to the person you owe, you can settle up with Nearby Payments – no bank details required! 

As with Monzo, you’ll get pretty much the same experience with your Starling teen account as you would with their adult account (minus the lending facilities). And if you’re prone to losing stuff, you might be particularly interested in the ability to lock and unlock your debit card if you can’t find it.

How do I open a bank account for 16 year olds?

This is relatively straightforward, whether you already have a children’s account with that bank or you’re an entirely new customer. You’ll need to fill in an application form and then prove you are who you say you are. A passport is good for this. Most banks will also want proof of address. A UK provisional photo card driving licence will do (if you’re not using this as proof of ID) or a recent bank statement.

The process varies slightly from bank to bank. For a Barclays Young Person’s account, for example, you can apply via video banking on its website if your parent or guardian is an existing Barclays customer (make sure you have your passport to hand). If they don’t bank with Barclays, you’ll need to call one of their branches and make an appointment.

Starling, meanwhile, promises that applying for its 16-17 account is quick and easy and entirely online – all applicants will need is their passport for ID purposes.

In theory, you can open as many teen bank accounts as you like. You might do this to make the most of a better interest rate from another bank, or perhaps to split up some of your money for a specific reason.

Will I get into debt?

Without an overdraft facility, it’s unlikely that you’re going to have a problem going into the red. If you don’t have enough money in your account, your payment will probably be declined. If it accidentally goes through, and your balance falls below zero, your bank shouldn’t charge interest or fees.

You may be hit with bank charges, however, if you use your card to withdraw cash or buy stuff abroad, so make sure you check the terms and conditions of your account carefully before going on holiday. 

Some bank accounts, as already mentioned, limit the daily amount of cash you can withdraw. And many banks offer free text alerts and mobile banking apps to help keep track of spending. Both features should help you avoid blowing more cash than you can afford.

What about e-money and prepaid cards?

E-money is cash that's stored in electronic form, which can be used to make payments. An obvious example is PayPal, but the term also includes prepaid cards. 

There are lots of prepaid cards and e-money companies aimed at 16 year olds (and younger) including nimbl and Rooster. You can find details of both on our prepaid card comparison page. Rooster is largely for kids (from aged four, but going up to 17), helping you graduate through financial milestones from organising pocket money to getting a payment card. The company prides itself on offering engaging money management tools and products to help develop financial capability. Nimbl is similar, offering a prepaid debit MasterCard and smartphone app to help children learn how to spend and save responsibly.

Prepaid cards need to be loaded with cash first, and are usually linked to a smartphone app. You can use them to make payments in shops, online and to withdraw cash. Like traditional accounts, many providers offer text alerts or app notifications to keep track of spending, but you won’t be able to set up direct debits.

One thing you’ll need to watch out for is annual or monthly service fees. Rooster, for example, has a yearly admin fee of £24.99 on its prepaid card. Other providers may charge to use the card at ATMs or abroad.

It’s worth noting, too, that e-money accounts and prepaid cards (unlike traditional bank accounts) are not protected by the Financial Services Compensation Scheme if the company goes bankrupt. However, according to e-money rules, any funds that you have on a prepaid card should be ring-fenced or safeguarded. That means if your prepaid card issuer goes into administration, the money you have on your prepaid card account should be protected and returned to you in full. You can read more on this in our dedicated blog on the subject.