USAA was founded almost a century ago in 1922, when the need for automobile insurance for members of the military drove a group of 25 Army officers to create a financial services group. Today, active-duty military members and veterans can do all of their banking with USAA Federal Savings Bank, from investing to checking.
And now, that includes kids. The USAA Youth Checking account is a free and secure spending account for kids under the age of 18. There are USAA financial centers near military bases in seven different states, or users can manage their account completely online. If you qualify to join USAA, find out if this account makes sense to meet your child or teen’s financial needs.
Related: See how this account compares to the best debit cards for kids and teens in 2021!
Who is it For
Target age: Kids between the ages of 13 and 18.
Good candidate: Users who are looking for a basic spend account that closely resembles a traditional checking account.
Users at least 13 years old and no older than 18 are eligible to become sub account holders. However, only military families qualify to become USAA members. USAA restricts membership to active-duty military members, retired service members, and honorably discharged veterans and their families. Immediate family members who can join include spouses and biological, adoptive, and step children.
When a child turns 18, this account automatically transitions to a USAA Classic Checking account and the now-teen assumes complete ownership of the account, previously run by their parents. If a parent wishes to remain on their account, they have the option of becoming a joint owner with their child (provided the child agrees). The Classic Checking account is also free.
Features and Benefits
This is a pretty basic checking account made kid-friendly. Parents and kids share control but parents have the final say over where their kids can spend their money and how much they can spend.
After registering for an account, a parent becomes the primary account holder and a child becomes a sub account holder.
This is a spending account, so there’s not much in the way of savings and educational features. Here’s what kids can do with their accounts.
💰 Earn: If a teen has a job, they can link their direct deposit payments to be deposited right into their account. They can also deposit checks through the mobile app. As for earning more money for themselves through the app, that’s not really possible. This platform does not include chores and allowance features, savings bonuses, or opportunities to earn money through referrals.
💸 Spend: The Visa debit card included with this account can be used almost anywhere Visa is accepted.
They can spend up to $3,000 per day via either signature- or PIN-based purchases ($6,000 total). The number of transactions in a day may not exceed 20 each of PIN and signature payments.
Users can also use their USAA debit cards to withdraw money from their accounts or check their balance at more than 60,000 in-network ATMs across the country. Plus, Federal Savings Bank automatically reimburses up to $15 in out-of-network ATM surcharges per month. Teens can make up to 20 ATM withdrawals every day, not to exceed $600 in total.
They can also transfer money from their account through Zelle to almost anyone using their name and phone number. Recipients do not need to be USAA members and can receive money through Zelle even if their bank is not compatible with the platform.
All accounts can be protected from overdrafting. This means that if a user attempts to make a purchase that costs more than they have in their account, USAA will automatically transfer money from a linked external bank account to cover the transaction. Parents must opt in to this service and grant permission for USAA to make withdrawals as needed.
Debit card cash advances are limited to five occurrences and a total of $1,000 per day.
💰 Save: Unfortunately, USAA hasn’t really included savings features in its Youth Spending account. If a user wants to save their money, they just have to be disciplined about preventing themselves from spending what’s in their account. They cannot create savings buckets to set money aside, set up savings goals to see their progress toward that big purchase, or earn account bonuses from their parents when they reach their targets. There is also no balance matching.
This checking account technically earns interest, but the catch is that you must have a balance of at least $1,000 and the rate is currently just 0.01%.
USAA recommends checking account users also open a savings account if they want to just stash money away for it to grow. However, we looked into it and the USAA Youth Savings account is only earning 0.01% across all balance tiers right now.
To transfer more money into their child’s account, parents can choose any of the following funding options:
- Direct deposit
- Cash deposit (in-person at a USAA branch or participating ATM])
- Mobile check deposit
- ACH transfer
- Credit or debit card transaction
- Wire transfer
A minimum deposit of $25 is required to open this account. Parents can fund an account with up to $5,000 per day
Parents can sign up for real-time text alerts when their child uses their card to make a purchase or withdrawal or have a low balance and have the power to set various limits on activity and spending. These include restricting access to the USAA app and website, enabling or disabling their ability to make deposits and transfers, and setting spending limits. If a parent does allow access to the site and mobile app, they can decide which of their accounts their child can see.
Parents can also, at any time, temporarily raise or lower the amount their child can spend on their card per day from the app. All of these settings are easily reversible.
How Much Does the USAA Youth Spending Account Cost
- $0 monthly maintenance fee,
- $0 for in-network ATM transactions,
- $2 per out-of-network ATM transaction (charged by third parties),
- $0 for low balance, $0 for overdrafts,
- $0 for overdraft protection,
- $29 non-sufficient funds fee (maximum of 3 a day),
- $5 returned item fee,
- $0 for incoming wire transfers,
- $20 for outgoing wire transfers.
This account is free if you don’t spend more than you have or transfer money. There is no minimum average daily balance requirement, but users must maintain a balance of at least $1,000 if they want to earn interest.
There are no subscription fees associated with this account.
USAA Youth Spending Account VS Competitors
This account is relatively inexpensive compared to competitor products that charge subscription fees and exorbitant transfer and funding fees. However, it’s not completely free. But if you’re careful (meaning you don’t use out-of-network ATMs, you opt into overdraft protection, and you don’t send wires) you could spend $0 using this account.
The USAA app is another advantage for this account. It is functional and reliable, as you would want any financial app to be.
Although not as modern as other kids’ banking platforms, the USAA kids’ checking account is compatible with most digital payment platforms including Google Pay, Apple Pay, and Samsung Pay. And in-app transfers are made through Zelle, one of the largest digital payment networks in the world and a company with a good overall reputation.
With access to in-person branches, this product will give your child or teen a very traditional banking experience. It’s for you, the parent or guardian, to decide whether or not this is important for you as banking trends towards digitization, but it’s certainly nice to have the option. Just be aware that there aren’t a lot of USAA branch locations.
Finally, cash deposits aren’t something that a lot of these accounts allow, so the fact that USAA permits them is a pro we want to point out.
This account doesn’t have as many features as other youth checking accounts like it such as Greenlight, Alliant, and Gohenry. For example, it doesn’t have any of the financial literacy learning resources you might look for in an account for young users and it doesn’t let kids create savings goals or earn more money for themselves by doing chores.
The current interest rate for this product is also so low that it’s hardly even worth mentioning. We know USAA is far from the only bank unable to provide high interest rates in the current economy, but it could be a while until this interest-bearing account actually becomes competitive. Plus, $1,000 is a high requirement for qualifying.
It’s also unfortunate that eligibility is so limited for those looking to become members of this institution. You have to be affiliated with the military to join, and this automatically disqualifies about 99% of the U.S. population.
Customer reviews for USAA are mixed. Those who choose to bank with USAA seem to be loyal to the institution for the most part, but that doesn’t mean every member is happy with their experiences.
Overwhelmingly, complaints have to do with disputes that were not handled well or resolved adequately. Many people have reported losing money from fraudulent activity or unauthorized transactions and not being able to get it back. Praise tends to be for the company’s customer service, which has a reputation for being polite and professional, and online site and mobile app, which are said to be easy to use.
On both Android and Apple devices, this app is above average. It has a rating of 4.8 out of 5 stars in the App Store and 4.6 out of 5 stars on Google Play. Though not much to look at, the app is sleek and well-organized. It can be more closely compared to your typical banking app than many kids’ banking apps we’ve reviewed.
To get help from a customer service representative, you can call 210-531-9722 or 800-531-8722. This is the institution’s main phone line, so you may have to wait a few minutes to be connected with the right department. Alternatively, you can chat with a virtual representative through the website or send a secure message through your account.
You can also visit a branch if you happen to live near one, but they’re pretty spread out. USAA has locations in Colorado, California, New York, Texas, Maryland, Virginia, and Florida (Note: financial centers are temporarily closed to the public at this time).
Is it Safe
Every USAA Youth Spending account is federally insured up to the maximum permitted amount of $250,000. USAA also protects minors’ personal information from being sold by third parties.
USAA also provides 24/7 fraud monitoring protection at no added cost.
How to Sign Up
To sign up for a USAA Youth Spending account, a parent must apply using their personal information. They will need to link a funding source to add money to their holding account, and then they can add a sub account holder, their child, and request a debit card for them.
You must be a USAA member to be eligible to open a youth checking account. If you’re not already, you can apply for membership online. The first step is verifying your eligibility, then creating your account and passwords. You can proceed to opening the checking account right away and are not required to apply for any other accounts.
This account may be a little boring, but it is a safe option if your teen is ready to learn how to manage their money through real-world experiences. The USAA Youth Checking account is not for you if you’re looking for a comprehensive platform that includes chores and allowance features and learning tools. It may be a good fit for you if you want your child to start learning to navigate a standard checking account and want to place controls on their spending.
Leave a Reply