My Teenager Needs Their First Bank Account with a Debit Card, Cheques and No Fees: Which Bank Should They Choose?

Once a teen starts working they are going to need a “real” bank account. Many large employers want to give pay by direct deposit. The student will likely also prefer to have a debit card for school trips rather than carry a large amount of cash for emergencies. And, if your teen leaves home to attend college or university, they may need to write cheques for rent or other fees. When one of my relatives recently turned 16, we helped him choose a bank to open a “real” chequing account and get their first debit card.

Students Should Not Have to Pay Fees to Handle Their Banking

I don’t think anyone should have to pay fees to bank but I especially don’t think students should have to pay someone for the privilege of depositing and withdrawing their own hard-earned money! Apparently, the major banks agree because many of them offer free bank accounts for full-time students. And smaller banks like Tangerine and PC Financial offer free bank accounts for everyone.

Why Teens Should NOT Open Their First Chequing Account at a Big Canadian Bank

I buy Crest toothpaste. I’ve switched flavours and styles several times over the years, trying to get one that doesn’t taste too badly and that offers the most types of protection for my teeth. I’ve never even tried Colgate or the other brands. Why? Because I started using Crest as a child and I’m loyal to the brand.

I don’t want my teenaged relative, or anyone else, to feel “loyal” to a bank. Canadian banks abuse customer loyalty: they offer less interest and charge more fees to their customers on an almost annual basis. At the same time, they offer incentives such as higher interest and lower fees to “new” customers which they won’t always match for existing customers even if the loyal customers call in and ask for a deal.

So while a teenager or full-time student can open a bank account with reasonable interest and no fees at almost any Canadian bank, I’m advising them not to open one at one of the Big Five Canadian banks (BMO, CIBC, RBC, Scotia or TD.) It’s too risky that they will decide to stay at that bank when they graduate: and then they will start getting zinged with annoying and expensive fees and earn low interest on any savings.

At Which Bank Did I Recommend Our Teen Student Relative Open Their Account?

I recommended our teenaged relative open his first chequing account at Tangerine.

The two banks we considered were

  • PC Financial
  • Tangerine

We didn’t consider

because they don’t offer a full-featured no-fee chequing account with a debit card and ABM access.

PC Financial’s No Fee Chequing account and Tangerine’s Chequing Account do offer:

  • a debit card
  • cheques
  • free debit payments
  • free cheque payments (although you have buy the paper cheques for Tangerine and don’t for PC Financial)
  • a modest interest rate paid on chequing account balances
  • online banking, including with an App
  • the ability to set up automatic payments, for free
  • the ability to receive payroll deposits, for free

Why Did We Pick Tangerine vs PC Financial for a First Chequing Account?

There were a variety of reasons why Tangerine fit the customer’s needs better:

  • Tangerine currently has an offer (at least until September 2016 and probably indefinitely) that gives a customer opening their first account ever with Tangerine or ING Direct, a $50 bonus if they open an account and deposit $100 and if they enter an Orange Key from someone already banking with Tangerine.
  • PC Financial does not offer any cash for opening a new account.
  • Tangerine does not require the new customer to already have a chequing account. You can get your id verified and your signature set on the file at Canada Post locations. You can verify your id and set up your signature for PC Financial at their in store pavilions but there is no store near where my relative lives.
  • The PC Financial chequing account is better than Tangerine’s if you write many paper cheques because the cheques themselves are free to order. (You do get 50 free paper cheques from Tangerine when you open an account, but after they are used up you have to buy them.)
  • Our relative doesn’t have to write any cheques yet, so that wasn’t an incentive.
  • Tangerine offers free email money transfers. If the person receiving the money is a Tangerine it’s very fast to receive and deposit the money. Many of this relative’s friends and family bank with Tangerine so this was a valuable option.
  • The student will also be opening a savings account to hold “back-up money” for regular spending. That will keep the money at a slightly higher daily interest savings rate until it’s needed than leaving it in the chequing account.
  • Transfers from Savings to Chequing accounts at Tangerine take place instantly. Transfers from savings to chequing at PC Financial are delayed at least one business day. That makes Tangerine way more attractive.
  • The Tangerine website is clearer and easier to use than the PC Financial website.

Why Only Open an Account at Tangerine?

Actually there is no reason to only open one account. In time, I expect my relative to open accounts at other institutions.

Why Open Bank Accounts at Several Different Banks or Financial Institutions?

In the near future, I will be encouraging this relative to start playing the “interest rate” game. Electronic banking makes it very, very easy to move cash savings including those for education or vacations to maximize the interest earned.

When my relative has a $1000 or so saved up, I’ll be suggesting he check the rates for savings accounts at

  • Tangerine
  • PC Financial
  • Oaken Financial
  • EQ Bank

And others to see what’s on offer.

If there is a good rate, it will probably be worth it to open a savings account and move the longer term savings money into it. And when a better rate is offered somewhere else, move it again. It only takes a few minutes of typing and sometimes a letter to get it going.

For now, though, our relative is happy to have a debit card and a chequing account to get their pay. I’m happy they are not paying any fees and are learning that it shouldn’t cost them any money to save their money safely in a bank.


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Do you have a young teen who needs to open their first “real” bank account? Where will they open it? Please share your views with a comment.

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Yes, we bank with Tangerine.ca among other places. If you open your first account ever with Tangerine (or ING Direct) using our Orange Key below, and deposit $100 before January 31, 2018, you and we will both get a cash bonus of $50 each. (Yes, they did extend the promotion for another few months!) All you have to do is enter the Orange Key 46470587S1 when you are opening your Account, and you’re set to go.

Just copy our Orange Key, then click on this Tangerine link to see the details and apply for an account. (Note: it only applies to people with no existing or previous accounts with Tangerine or ING Direct.)
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