Personal
Child and Teen Accounts
Money Tips
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Financial Education

Money Tips

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Types of accounts for children and teens Open in new window

What do banks do? Open in new window

Different ways to pay Open in new window

Payment Cards Open in new window

Information on fraud and scams Open in new window

Tips on staying safe online Open in new window

Types of accounts for children and teens

Read below to find out which account(s) could work best for you.

Current accounts

This account is used to manage money coming in and going out.

This type of account comes with a debit card which you can use to withdraw cash or pay using ‘chip and PIN’.

If you’re over 18, you may be able to apply for an overdraft, which allows you to use more money than you have in our account.The bank sets the amount, and you may be charged.

Pay your bills and standing orders using direct debit.

When you earn a wage/salary, it will be paid directly into this account.

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Savings accounts

A savings account is a safe place to put your money if you’re saving up for something for the future.

When you’re over 16, you’ll pay tax on interest you earn from the account.

This type of account usually provides better interest rates than current accounts.

If you’re under 16 or a pensioner, you won’t pay tax.

The more you save into this account, the more you’ll earn from interest as a result.

What do banks do?

Banks provide a variety of different services for their customers. Read below to find out more about what they offer.

Reasons why banking is useful

It keeps your money safe.
It can help you save up and manage your money.
Money won’t get damaged or lost when it’s in your account.
You have access to bank cards, statements, and online banking.
Having an account is a safe way to receive money, such as wages.
You can exchange foreign currency.
Paying for bills is easier with a bank account.
You can apply for loans.

What do banks do with your money?

When you open a bank account, a bank will accept your money and provide you with different services.
Banks buy money-related products called investments, such as shares, securities and bonds. Interest from loans and profits from the bank’s investments is their reward for lending.
Banks lend money to people to those who need it to purchase things such as cars and houses (these are called loans and mortgages).
The Government makes rules for banks to ensure people’s money is safely handled and looked after.

What is interest?

When you lend money, you receive interest on it. But when you borrow money, you must pay interest on it.
Interest is usually shown as a percentage (also known as the interest rate or APR - Annual Percentage Rate) of the amount you want to borrow, e.g., if you borrow £100 at an interest rate of 10%, the interest is £10.
The more you borrow, the most interest you’ll pay.
When applying for loans, credit cards or savings accounts, the interest will always be stated.

Services offered by banks

Current accounts – to manage money daily
Saving – through savings accounts or investments
Borrowing – through loans or credit cards
Mortgages – loans to help you buy a home
Insurance – for homes, cars and travelling
Mobile apps – for banking on the move
Foreign currency – through cash or pre-paid currency cards so you can pay for things abroad
Paying bills – these can be set up through your bank.

Different ways to pay

Banks provide a variety of different services for their customers. Read below to find out more about what they offer.

Cards

Purpose	Payment cards are used to make instant payments electronically, without the need to use cash. There are two main types: debit cards and credit cards.
Where	Online and in most shops. Debit cards can be used to withdraw cash at an ATM also.
Who	Debit cards are issued to anyone holding a current account. Current accounts are available to adults and to children however some features of the account may not be available to under 18s. Credit cards are for adults only as using a credit card is borrowing money. You have to be over 18 to apply for a credit card.
Features	Debit cards access the available money in your current account. Credit cards work differently. You can use a credit card to spend money up to a 'credit limit' which you then repay at a later date. You may be charged interest depending on how long it takes you to pay back what you have spent.

Apple Pay / Google Pay (Digital Wallets):

Purpose	To pay for goods and services using your phone instead of cash or cards.
Where	You can pay online, in shops and for services that accept contactless payment
Who	You need to be at least 13 years old for Apple Pay and 16 years old for Google Pay.™ Most digital wallets need parental consent for people under 18 years old.
Features	These are directly linked to your debit and credit cards. With debit cards, the money is taken from your bank account straight away. Payments are easy as they are contactless and don’t require you to fill in details or remember passwords. These are safe payments that protect your personal information through security measures.

Cash

Purpose	To pay almost anywhere, apart from online.
Where	Paying for goods and services in shops.
Who	Anyone can use cash.
Features	Pay for goods and services immediately and avoid debt. You can only spend it if you have it. It’s easy to use. It can be easily lost or stolen. Can’t be used for online shopping.

Online Banking

Purpose	Used to pay money directly into your personal account or to pay companies directly, for things such as bills. You can also use this to check your account and its details.
Where	You can use this anywhere with your smartphone, computer, or tablet, as long as you have a stable internet connection.
Who	You must be at least 16 years old to bank online.
Features	Transfer money between your accounts. Make payments at any time and anywhere using your sort code and account number. Set up bill payments (recurring payments). Mobile apps for banking on the move.

Taking a closer look into payment cards

There are several cards, listed below, that allow you to access your money and pay for goods and services. In this section you’ll see the features of these different cards.

Debit cards

Use – To withdraw money from your account or pay for goods and services.

Who – This type of card can be used from the age of 11 onwards.

Where – You can use the card at cash withdrawal machines (ATMs), in shops, or online using the details on the card.

Features of debit cards

Allows you to withdraw money from your bank account.
Some shops will allow you to get cashback. Cashback is where you can withdraw cash from your bank account while making a purchase.
If you’re aged 18 or over, you can apply for an overdraft. If successful, an overdraft will allow you to withdraw money (up to an agreed limit) even if you don’t have enough in your account

Credit cards

Use – To pay for goods or services and withdraw out cash from a machine (you’ll have to pay interest on the amount you spent if you don’t pay it all back within an agreed time).

Who – You must be at least 18 years old to apply for a credit card and you must pass the credit scoring (this is an analysis performed by banks and lenders to determine your credit score*).

Where – In shops, online or at ATMs (for cash withdrawal).

Features of credit cards

If you withdraw cash, you’ll be charged interest and a handling fee.
Interest rates can vary, it is important that you pay attention to your card use carefully.
Late or missed payments can affect your credit rating.
*Credit score: a credit score is to show how reliable someone is at paying back money they have borrowed.

Store cards

Use – To pay for goods or services in a specific shop.

Who – For people aged 18 or above who pass the credit scoring when applying.

Where – In the specific shop(s) or online.

Features of store cards

You’ll have to pay interest on the amount you spent if you don’t pay it all back within an agreed time.

This type of card often has high interest rates, so make sure to pay attention to the rates and use this type of card carefully.

Operated by finance companies on behalf of the store.

Late or missed payments can affect your credit rating.

Digital wallets

Use – To pay for goods or services using your phone instead of cash or cards.

Who – You need to be at least 13 years old for Apple Pay and 16 years old for Google Pay.™ Most digital wallets need parental consent for people under 18 years old.

Where – Online and in store everywhere that accepts contactless payments.

Features of digital wallets

Digital wallets are linked to your debit or credit cards.
For debit cards, the money is immediately taken from your bank account.
There’s no upper spending limit.
Made for easier payments as you will not need to fill in details or remember passwords.
Safer payment method as they use authentication and data encryption to protect personal information.

Pre-payment bank cards

Use – To pre-load money onto a card to pay for goods or services.

Who – People aged 18 or above.

Where – At ATMs, shops or online.

Features of pre-payment bank cards

You put the money ‘on’ to the card in advance, it can’t be used otherwise.
You don’t always need a bank account.
There’s generally a charge to apply for or use this service.

Smart cards

Use – To pre-load money onto a card to pay for certain goods or services.

Who – Depends on the use e.g. a mobile phone ‘top-up’ card needed for pay-as-you-go phones.

Where – In specific places e.g., for transport, food in school canteens, at PayPoints or for mobile phone top-ups.

Features of smart cards

You put the money ‘on’ to the card in advance, it can’t be used otherwise.
Re-charged at designated places only, sometimes online.
No need for a bank account.
Various services use these cards, e.g. mobile phones, transport, gas, electricity and even some schools and universities.

All about fraud and scams

Unfortunately, wherever there’s money there will also be fraud and scams. Thankfully, many of these frauds and scams are well known and there are signs you can look out for to prevent yourself from being caught out.

What is fraud?

Fraud is when people are tricked out of their money. For example, fraudsters or hackers commit fraud when they steal personal information and bank details (known as identity theft).

Phishing and smishing

Phishing comes in the form of an email and smishing, a text. They encourage you to reveal personal details or send money, by sending an ‘urgent’ email or text which will take you to their website. This is where fraudsters or scammers will try to obtain your personal details and may even try to get you to pay for something. The site might look real, but it is really a fake site set up by criminals to either steal your details or your money.

Ways you can prevent this:

Banks will never ask you to confirm ALL the letters or numbers of your bank card, PIN or password. Never provide your full personal details online.
Do your research. Learn how to recognise fake messages and websites from real ones.
Never pay for anything online that isn’t from a secure website address.

Pharming

Pharming is a piece of computer code that sends internet users to a fake website. You’ll be on a genuine website but the code on your computer will allow fraudsters to direct you to a fake website without your knowledge, to capture personal details such as bank card numbers. This type of code often gets onto computers when a person clicks on a link in spam email.

Ways you can prevent this:

When buying online, always check that you’re on a secure payment website by looking at the web address in the bar at the top. You should see a padlock and ‘https’ rather than ‘http’. If in doubt, do not proceed with any transaction.
Make sure to do your research and find the best available antivirus software to have on your devices connected to the internet.
Never click on a link in an email from a source you don’t recognise.

Prize draws and lottery scams

These scams will come in the form of a letter or an email offering you a large prize, saying you have been selected or have won. Within the letter or email they’ll ask you to send a small amount of money, or to provide your bank details or prove your identity to claim your ‘prize’. The fraudsters then steal your money or your identity. You might be told to ring a number to claim your prize, and this will be a premium number that costs a lot of money, which then goes to fraudsters.

Ways you can prevent this:

Receiving an email or a letter containing a prize that seems ‘too good to be true’, then it most likely is. If you’re ever unsure, speak to a member of your family or a friend for advice or do your research.
When doing your research on a potential scam, you may find other people that have reported the scam already.
Never send money, give your personal details, or call a number if you don’t recognise the sender or where it’s coming from.

Tips on staying safe online

Never give out your personal or bank account information.

Keep your bank card and PIN number secure. Don’t write your PIN number anywhere.

Keep your personal information private i.e., shred important letters and documents.

Always keep your receipts.

Be wary if you are contacted unexpectedly by a company or person that you haven’t heard of before.

Be suspicious if you’re pressured into making an immediate decision.

Be suspicious if a ‘company’ lacks clear contact details e.g., only includes a mobile number or a PO box address.

Keep in mind: if it sounds too good to be true, it probably is – there’s no such thing as free, quick, or easy money.

When selling online, never send goods until you receive full payment.

Don’t share personal information on social media.

Find out more about common scams Open in new window