You can open a checking account for a baby, but the account belongs to the parent or guardian, not the child
A baby cannot legally own a checking account on their own. Banks require the account holder to be at least 18 years old and able to sign contracts. What you can do instead is open an account in your name that you manage on behalf of your child, or open a custodial account — a special account designed for minors where a parent or guardian controls the money until the child reaches the age of majority (usually 18 or 21, depending on your state).
The practical difference matters. A regular account in your name gives you full control but no legal separation between your money and your child's. A custodial account creates a legal boundary: the money belongs to the child, you manage it, and when they turn 18 or 21, it becomes theirs to control. Some families use custodial accounts to teach money habits early; others use regular accounts for simplicity.
Banks handle these accounts differently. Some offer them freely; others charge monthly fees or require a minimum balance. A few have no fees at all if you meet certain conditions, like setting up direct deposit or keeping a small balance.
Key Takeaways
- A baby cannot own a checking account; a parent or guardian must open and control it until the child reaches 18 or 21.
- Custodial accounts are legally owned by the child but managed by you, and the money transfers to the child when they come of age.
- Regular accounts in your name are simpler to open but create no legal separation between your money and the child's.
- Many banks offer youth or teen accounts with lower fees, but these still require a parent or guardian on the account.
- You will need the child's Social Security number and birth certificate to open any account in their name or as a custodian.
Custodial accounts versus regular accounts in your name
A custodial account (also called a Uniform Transfers to Minors Act account, or UTMA account) is registered to the child but controlled by you as custodian. The bank issues a Social Security number for the account, and the child's name appears on the account title. When the child reaches the age of majority in your state, the account automatically becomes theirs, and you lose control.
The main advantage is clarity: money in a custodial account is legally the child's property, which matters for inheritance, taxes, and teaching the child about money. The main disadvantage is that you cannot take the money back once the child turns 18 or 21 — it belongs to them. If you open a regular checking account in your own name and deposit money for the child, you retain full control and can use the money for any purpose, but there is no legal separation.
For a baby, the practical difference is small. Most parents use custodial accounts to save for the child's future (college, first car, moving out) and regular accounts for everyday expenses the child will need while growing up. Some families use both.
What you need to open an account for a baby
To open any account for a minor, you will need:
- The child's Social Security number
- The child's birth certificate or other proof of age
- Your own government-issued photo ID
- Proof of your address (utility bill, lease, or bank statement dated within the last 60 days)
- Your Social Security number
Some banks also ask for the child's full legal name as it appears on the birth certificate, the child's date of birth, and your relationship to the child (parent, legal guardian, grandparent). If you are not the biological parent, you may need to show legal guardianship documents.
You can open the account in person at a branch or online, depending on the bank. Many banks now allow you to start the process online and finish it in a branch, or complete it entirely online if you have a camera to photograph your ID and documents.
Banks and credit unions that offer accounts for babies and young children
Most major banks offer accounts for minors, but fees and features vary widely. Some banks charge monthly maintenance fees ($5 to $15) unless you meet conditions like maintaining a minimum balance or setting up direct deposit. Others waive fees for accounts under a certain age or for custodial accounts specifically.
Credit unions often have lower fees than banks and may offer accounts for minors at no cost. You must be a member of the credit union to open an account, which usually requires living or working in a certain area or belonging to a may have access to employer or organization.
Online banks (like Ally, Charles Schwab, and others) typically charge no monthly fees for accounts for minors, but they offer no physical branches, so deposits must be made by mail, mobile check deposit, or transfer from another account. This works well if you already bank online; it is less convenient if you need to deposit cash regularly.
Some banks market "teen" or "youth" accounts with features like spending limits, parental controls, or debit cards with restricted access. These are designed for older children (ages 13 and up) who are ready to make their own purchases. For a baby, these features are not relevant, so a standard custodial or minor account is sufficient.
How to decide between custodial and regular accounts
Choose a custodial account if you want to set aside money specifically for the child's future and you want that money to legally belong to them. This is common for savings accounts funded by grandparents, birthday gifts, or money set aside for college. The child will have access to the money at 18 or 21, and they will owe taxes on any interest or earnings in the account.
Choose a regular account in your name if you want to manage money for the child's everyday needs (diapers, childcare, medical expenses) without creating a separate legal entity. This is simpler to set up and gives you full control, but the money is legally yours, not the child's.
Some families open both: a custodial savings account for long-term goals and a regular checking account for day-to-day expenses. This is not required, but it can help you organize money by purpose.
Tax implications of accounts for minors
Money in a custodial account belongs to the child, so any interest, dividends, or earnings are taxed as the child's income, not yours. For 2024, a child with less than $1,450 in unearned income (interest, dividends) owes no federal income tax. Between $1,450 and $2,900, the child pays tax at their own rate, which is usually lower than yours. Above $2,900, some of the income may be taxed at your rate under the "kiddie tax" rule.
A regular checking account in your name generates interest taxed to you, not the child. Most checking accounts earn little or no interest, so this is rarely a concern for everyday accounts.
When the child turns 18 or 21 and the custodial account becomes theirs, there is no tax event — the transfer is not taxable. However, the child will owe taxes on any earnings the account generates from that point forward.
Debit cards and access for babies and toddlers
Most banks issue debit cards for custodial and minor accounts, but a baby cannot use a debit card. The card is for you, the parent or guardian, to withdraw money and make purchases on behalf of the child. Some banks allow you to order a second debit card in the child's name once they reach a certain age (usually 13 or older), with parental controls that limit spending or restrict where the card can be used.
For a baby, the debit card is simply a tool for you to access the account. You might use it to pay for childcare, medical expenses, or other costs you want to track separately from your personal spending.
Frequently Asked Questions
What happens to a custodial account when the child turns 18?
The account automatically becomes the child's property, and you lose legal control. The child can withdraw the money, close the account, or continue using it. Some banks require the child to visit a branch or sign new paperwork to confirm the transfer, but the money is theirs to do with as they wish.
Can I use money in a custodial account to pay for the child's expenses?
Yes. As custodian, you can withdraw money to pay for the child's food, housing, education, medical care, and other needs. However, you cannot use it for your own expenses or to replace money you would normally spend on the child anyway. The money must be used for the child's benefit.
Do I need a separate account for each child?
Yes. Each child needs their own account in their own name (or as a custodial account in their name). You cannot combine multiple children's money into one account, even if you are the custodian for all of them. This keeps each child's money legally separate.
Can a grandparent open a custodial account for a grandchild?
Yes, if you are the legal guardian or have permission from the parents. Some banks require proof of guardianship or a letter from the parents. If you are not the legal guardian, ask the parents to open the account and then add you as an authorized user, or have them open it and give you access to manage it.
What if I want to close the account before the child turns 18?
You can close a custodial account at any time, but the money still belongs to the child. You cannot keep it for yourself. You would need to transfer it to another account in the child's name or give it to the child (if they are old enough to receive it). Closing a custodial account does not change who owns the money.