Children’s account

Josefine Lietzau is an editor in the Bank& team Investing money. Already during her studies of German and English she worked for the editorial offices of the Grune Liga, the Judische Zeitung and Superillu. After her master’s degree, Josefine Lietzau completed a traineeship at the online consumer portals Banktip and Posttip, where she subsequently worked as an editor.

Current accounts for children are usually free of charge.

Children can’t open accounts on their own, parents must always approve.

Children have their own tax allowance. Parents are not allowed to use it themselves.

When choosing a children’s account, also pay attention to the later costs for adults – especially if your child will soon be of age. So you save him a change of account.

Get the necessary documents together. This can be a bit more complicated with a child account; for example, you will need the birth certificate.

In this guide

At some point, the time will come – your child will be dealing with money more often and it will be time for the first own current account. For parents, it’s usually free, and for children, the first bank card with their own name means a new piece of freedom. However, the whole thing is not without problems.

Which account should it be?

When choosing a children’s account, you should make sure that the bank offers the following services No basic fee required for the account and the associated cards. This is much easier with children’s accounts than with accounts for adults. The choice is greater because banks want to retain new customers early on. But you should check whether there are costs elsewhere, for example for transferring or withdrawing money.

Your child should be able to get cash easily: So check how many cash machines they can get free cash from and if they are available in the area. Savings banks and credit unions come into question, but also direct banks, which offer the free cash supply via a Visa or Mastercard card allow them to. Because the direct banks pack the cards also with the child account in addition – admittedly without granting a credit.

If your child is a little older, you should remember that branch banks usually raise the fees as soon as the child no longer the conditions fulfilled for the inexpensive accounts. If you have chosen a branch bank, it is time to switch to another, cheaper account. How quickly this should happen depends on the bank in question. Some banks switch the account to much more expensive models as soon as you reach the age of majority, while others offer inexpensive student accounts. Then the child can take his time with the switch.

Tip: With direct banks it can be difficult, deposit cash. But this is exactly the function children need: they want to deposit their pocket money or money gifts from their grandparents. If it is not possible to deposit cash in your child account, your child can simply give the money to you. You then transfer it to the child’s account.

Other bank products for children

Banks not only offer checking accounts for children. With some financial institutions there are also good interest-bearing savings accounts and overnight deposits. The children often get higher interest rates than adult customers – but usually only for smaller amounts: Banks set limits on maximum investment or hardly pay interest on larger sums at all. Example "Mausekonto" of the Hamburger Sparkasse (as of December 2021): Up to 500 euros there is 2 percent and for everything above only 0.01 percent.

Parents can also open a securities account for their child at a bank and thus already invest money in funds.

If you have to choose between several accounts for minors, check whether the bank offers the best service for your child Other good offers for children has. This facilitates the choice.

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How parents open a current account for their child?

Adults can open a current account relatively easily: You just need to choose an account, fill in and sign the application form on the Internet or on paper, and prove your identity – either by Postident or Videoident.

For minors, however, opening an account is more difficult. Children younger than seven years of age are not legally capable and cannot conclude contracts. From the age of 7. minors have limited legal capacity. You can sign contracts, but the parents must always agree, because hardly any contract has only legal advantages (§ 107 BGB).

Therefore, parents must also agree to the opening of the account – both of them, even if they have separated. Exception: If a parent has sole custody, he must prove this with the custody order. Unmarried parents with joint custody must also submit this document. If the parents have different surnames, the marriage certificate must also be presented.

Parents prove the identity of the child with a copy of the Birth certificate after; the parents must identify themselves by means of their identity cards. Which documents are required by the banks depends on the bank in question. Separated parents who do not want to open the account together in the branch or sign the Postident documents together should contact the selected bank to find out if the bank offers a solution for such cases.

There is one exception: If your underage child has a different surname than his or her parents, he or she is allowed to transfer money Employment contract If you have a child account, it can open an account without your consent (§ 113 BGB). However, you must first agree to the employment contract. When opening the child brings the contract then with. This exception does not apply to trainees.

What is special about a child account?

Parents can partially restrict the functions of a youth account. So you can determine for example with some banks, How much money your child can withdraw. There are also limits to bank transfers, usually very young children are not allowed to transfer money at all, and later only after their parents have given their consent. Children therefore do not have their own access to online or mobile banking at many banks before a certain age. How exactly the account is and can be restricted depends on the chosen bank.

The pocket money account usually includes a Girocard, with which the children can pay or withdraw money. Some banks also issue prepaid credit cards with the child account. Sometimes a real credit card is also included in the youth account, However, the children do not get a credit line. The reason for this is that minors are not allowed to get into debt. That is why banks do not set up an overdraft facility for them.

Who owns the money?

Even if you have to be there when your child opens an account under his name and you have a lot of control over the money – the money belongs to your child, no matter whether it is on the current account or on a daily allowance account. This also applies if your child spends the money on something other than what you actually intended.

Children have a own tax allowance. You can also apply for a non-disbursement order for your child’s money or issue exemption orders. However, you must not take advantage of this for your own financial investment in order to save on taxes.

Even if you receive Hartz IV, it is important that the account is in the name of the child and that the money belongs to the child: children have a right to a child’s allowance Hartz IV a separate allowance. If the child does not have his or her own savings account, the offices add the money to the parents’ assets, which negatively affects Hartz IV payments.

What problems can arise when paying?

children are legally protected against debts. Therefore, they usually can not overdraw their account when shopping. If there is not enough money in the account, payment by card fails. There is, however, one exception: in the case of electronic direct debiting (ELV), i.e. when paying with a Girocard and signature, no check is made to see whether the account is covered. This can lead to children shopping, the merchant does not get the money and therefore sends a collection letter. This is not surprising, since neither merchants nor collection companies know how old the buyer is.

Banks, merchants and also consumers can counteract this. This allows banks to mark the cards so that merchants can see through the cash register that it is the card of a minor and credit balance is necessary for payment. Or merchants always require children to enter the pin. minors can also force the entry of the pin ("user selection"). To do this, they must select a different payment method at the POS terminal before inserting the card. To make it all work, children better explain to the cashier what they want to do and why.

Collection letter with children

If the child’s account is overdrawn due to the direct debit, you can try to settle the matter without paying the collection fees. To do this, you need to know: Normally, the so-called pocket money paragraph (§ 110 BGB) would apply. The says that children can buy things if they have received the money for the purchase, they are free to dispose of it and have already paid for it. In such cases, the parents no longer have to agree to the purchase. If that child’s account is not covered, but also the pocket money paragraph does not apply.

In the case of an uncovered account, the payment is missing, the purchase contract is therefore "pending invalid", as the lawyers say, until the parents give their consent. Should in such a case a Collection letter If you do not have enough money, it is best to write to the merchant, pointing out the age of the child and explaining that you do not agree with the purchase.

You will probably not get around the fees of the bank for the return debit note. After all, this is the tool that the bank uses to prevent the child from getting into debt.

The German Retail Association supported us in our research on the ELV topic.

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