Opening a bank account is a key step toward financial independence and security. While this process may sound confusing or intimidating, it’s totally worthwhile to set yourself up for the future! In this article, we'll share six key reasons you should open a bank account as a teenager or young adult.

Note: Before making any big financial decisions, we strongly advise you to talk to a parent/guardian or a trusted adult. They can help you make informed choices about building credit and taking on debt that can ensure your financial stability and success in the future.

Financial independence

Having a bank account allows you to manage your money and make smart financial decisions, which are important steps toward becoming financially independent. Through an active bank account, you can learn a lot about how you make and spend your money, which can give you the discipline down the road to manage bigger financial decisions such as securing loans for college or a car. By putting your money into a savings or credit account, you can start making your money work for you! 

Necessity and convenience

When you get a job, your bank account will allow you to receive your paychecks via direct deposit. If you use a payday lender or check-cashing business, they will take a percentage of your check just so you can receive your own money. Having direct deposit ensures that your entire paycheck goes to you! 

Additionally, through your bank account, you can easily deposit and withdraw money, make online purchases, and pay bills without having to rely on cash or money-sharing apps. Bank accounts, overall, make your day-to-day financial decisions much more convenient! 

Safety and security

Your bank account provides a secure place to store your money, since it's insured by the FDIC (a federal agency). This means that if your bank were to go out of business, your money is still yours! This is more ideal than keeping stashes of cash that can be stolen or ruined, and more secure than keeping money in money-sharing apps, which have different levels of insurance than banks. 

When setting up a bank account, make sure that it is FDIC-insured. This information should be easily available on a bank's website. 

Budgeting and money management

Having a bank account makes it easier to keep track of your spending and budget your money. Most bank accounts offer online banking and a mobile app that can help you monitor your account activity and make sure you're sticking to your budget. Many banks also offer financial education resources and programs that can help you learn more about managing your money and planning for the future. By signing up for a bank account, you can take advantage of these resources and gain valuable financial skills that will benefit you for years to come.

Saving money and preparing for the future

A bank account can help you save money! For example, there are features that allow you to automatically deposit a percentage of each paycheck into your savings account. All savings accounts, and some checking accounts, will also offer you interest, so as your money sits in the account, it will continue to grow! Having a solid history with banks, a positive relationship with your money, and a strong credit score will help you be financially independent in the long run.

Next steps

Now that you know the reasons to open a bank account, be sure to check out the rest of our money management resources to learn how to be a smart spender and saver! Have any job or finance-related questions for us? Text #Jobs to 33-55-77. If you're using a mobile device, click here to have the text message set up for you!