Why Budapest Parents Should Open a Bank Account for Their Under-18 Children

Published: December 23 2023

Teaching children about financial literacy is an important task for parents. One way to do this is by helping them open a bank account at a young age and giving them some pocket money. In this article, we will discuss why it is important for parents in Budapest to open a bank account for their under-18 children and the benefits it brings.

Even before their 18th birthday, most young people in Budapest encounter financial obligations such as purchasing transportation tickets, buying snacks, or going to the movies with friends. These may seem like small expenses, but they can provide valuable lessons in everyday money management. By allowing children to make independent decisions about how to use their pocket money within certain boundaries, they can learn important skills such as budgeting, saving for future expenses, and using digital banking applications.

According to a recent study, 28% of parents in Budapest give their under-18 children a fixed amount of pocket money. While some teenagers wish to earn more than 20,000 HUF per month, only 9% of parents fulfill this desire. The majority of parents give less than 5,000 HUF per month, and around 20% do not provide any pocket money at all. Some parents choose to give pocket money in cash, while others prefer to make transfers to their child's bank account. Transfers offer the advantages of avoiding the risk of money loss or damage and providing a better overview of money transactions.

The minimum age for opening a bank account varies among financial institutions in Budapest. Typically, children can open a bank account with parental consent starting at the age of 14. The availability of a bank card may also vary, but many accounts for students over the age of 14 come with no restrictions on bank card usage. For example, Raiffeisen Bank offers the YELLOO account, which can be opened by children as young as 14 and includes free monthly account maintenance.

When opening a bank account, it is important to consider associated costs such as account maintenance fees, card fees, notification costs (e.g., SMS alerts), transaction fees, and cash withdrawal fees. However, many banks offer account packages that provide certain services free of charge in order to attract customers. For instance, the Raiffeisen YELLOO account offers free card usage, domestic transfers up to 20,000 HUF, direct debits, the first two cash withdrawals from domestic ATMs, and free access to internet and mobile banking. Additionally, the bank currently has a promotion offering a free VertiCard and waiving the card fee for the first year.

(Note: This blog post was supported by Raiffeisen Bank.)

Why is it important for children in Budapest to have their own bank account? It is important for children in Budapest to have their own bank account because it allows them to learn how to manage money at a young age. It also helps them develop financial literacy and skills, such as budgeting and using digital banking applications.

At what age can a child have a bank account in Budapest? The age at which a child can have a bank account in Budapest may vary depending on the specific bank and its account packages. Generally, children can open a bank account with parental consent starting around the age of 14. Many banks offer special accounts for students that come with a debit card and no age restrictions.

What are the benefits of opening a bank account for a child in Budapest? Opening a bank account for a child in Budapest allows them to have a safe place to store their money and learn about personal finance. It also teaches them financial responsibility, independence, and the importance of saving and budgeting.

What are the typical costs associated with a bank account in Budapest? The costs associated with a bank account in Budapest typically include account maintenance fees, card fees, transaction fees, and cash withdrawal fees. However, many banks offer fee-free account options and services to attract customers. For example, the Raiffeisen YELLOO account offers free card payments, free domestic transfers up to 20,000 HUF, and the first two cash withdrawals from domestic ATMs each month are also free.

How much pocket money do Hungarian teenagers typically receive? According to a recent study, about 28% of parents give their children a fixed amount of pocket money. The amount varies, with only 9% of parents fulfilling the desire of 16-18-year-olds for a monthly income exceeding 20,000 HUF. The majority of parents give less than 5,000 HUF, while around one-fifth of parents do not provide any pocket money at all.

Why is it beneficial to make pocket money transfers to a child's bank account in Budapest? Making pocket money transfers to a child's bank account in Budapest has several advantages. It eliminates the risk of money loss or damage, provides a digital record of transactions, and teaches children how to use digital banking applications. It also allows parents to easily track their children's spending and savings habits.