A child can open a high-yield savings account, but only with a parent or guardian as a co-owner

Banks do not let minors open accounts alone. Every high-yield savings account for a child under 18 requires an adult to open it jointly, sign the paperwork, and remain on the account. The adult is legally responsible for the money and the account activity. Some banks set a minimum age — often 13 or 14 — before a child can be added to an account, while others allow younger children if the parent opens it first.

The account itself works the same way as an adult high-yield savings account: your money earns interest at a rate higher than a traditional savings account, usually between 4% and 5% depending on the bank and current market conditions. The interest rate changes, so what you earn today may not be what you earn in six months. The money is insured by the FDIC (Federal Deposit Insurance Corporation) up to $250,000 per account holder, which means if the bank fails, your money is protected.

The main difference is control. The parent or guardian controls the account until the child reaches the age of majority in their state — usually 18, sometimes 21. After that, the account can be transferred to the child's name alone, or the adult can stay on it if both parties agree.

Key Takeaways

  • A parent or guardian must open the account jointly with the child and remain the account owner until the child reaches legal adulthood.
  • Most banks require the child to be at least 13 years old, though some allow younger children if a parent opens the account first.
  • High-yield savings accounts for minors earn interest at rates between 4% and 5%, though rates change based on market conditions.
  • The account is FDIC-insured up to $250,000, protecting the money if the bank fails.
  • The parent controls deposits, withdrawals, and account decisions until the child turns 18 or 21, depending on state law.

Which banks offer high-yield savings for minors

Not all banks that offer high-yield savings accounts to adults also offer them to minors. Online banks are more likely to have them than traditional brick-and-mortar banks. Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank all offer high-yield savings accounts for minors, though the exact terms and minimum age requirements vary by bank.

Before you open an account, check the bank's website for the specific rules: what the minimum age is, whether the parent must be a customer already, what the current interest rate is, and whether there are monthly fees. Some banks charge a monthly maintenance fee if the balance falls below a certain amount, which can eat into the interest you earn. Others charge no fees at all.

Call the bank directly or visit a branch if you have questions the website does not answer. Banks change their policies and rates frequently, so what was true last month may not be true today.

What documents you need to open the account

You will need proof of identity for both the parent and the child. For the parent, this is usually a driver's license, passport, or state ID. For the child, it can be a birth certificate, school ID, or passport — the bank will tell you what it accepts. Some banks also ask for a Social Security number for both the parent and child, which they use to verify identity and report interest income to the IRS.

If you are opening the account online, you may be able to upload photos of these documents. If you are opening it in person at a branch, bring the originals. Have the child present if possible — some banks require it, others do not.

The parent will need to sign the account agreement. The child may also be asked to sign, depending on the bank's policy and the child's age. Read the agreement before signing so you understand the rules about withdrawals, fees, and what happens if the account goes inactive.

How much money can go into the account

There is no legal limit on how much a minor can deposit into a savings account. The FDIC insurance limit is $250,000 per account holder, so if the account has more than that, the amount over $250,000 is not insured if the bank fails. For most families, this is not a concern.

Some banks set their own minimum deposit to open the account — often $0, sometimes $25 or $100. Check the bank's website for this detail. After the account is open, you can usually deposit as much as you want, as often as you want, with no penalty.

Withdrawals work the same way. The parent can withdraw money at any time. Depending on the bank, the child may also be able to withdraw money if they are old enough and the parent has given them access, or the parent may be the only one who can withdraw. Ask the bank about this before you open the account if it matters to you.

Tax reporting and the child's tax return

Interest earned in a minor's savings account is taxable income. The bank will send a 1099-INT form to the IRS and to the account owner (usually the parent) by January 31 of the following year, reporting how much interest was earned. If the child earned more than a certain amount in interest — $1,300 in 2024, though this changes yearly — the child may need to file their own tax return.

If the child does not have other income and the interest is the only money they earned, the parent can usually claim the child as a dependent and report the interest on the parent's tax return instead. Talk to a tax professional or check the IRS website to understand the rules for your situation.

The interest earned is not a gift and does not count against gift tax limits. It is simply income the account generated, and it is reported like any other interest income.

Moving the account to the child's name when they turn 18

When the child reaches the age of majority in your state — usually 18 — the account can be transferred to their name alone. This is not automatic. You will need to contact the bank and ask them how to remove the parent from the account or convert it to an adult account in the child's name only.

Some banks make this process simple: you fill out a form and the change takes effect. Others require the child to come in person with ID to sign new paperwork. A few banks close the minor account and open a new adult account, which means the account number changes but the money moves over.

Before the child turns 18, talk to them about what will happen to the account and whether they want to keep it at the same bank or move the money somewhere else. If they want to move it, they can open a new account at a different bank and transfer the balance over, though this takes a few business days.

Alternatives if the child is too young for a high-yield account

If your child is younger than the bank's minimum age for a high-yield savings account, you have other options. You can open a regular savings account at the same bank in your name and set aside money for the child — it will not earn as much interest, but it is still insured and safe. You can also open a 529 education savings plan, which is designed for college savings and offers tax advantages, though the money is meant for education expenses.

Another option is to open a high-yield savings account in your own name and keep the child's money there until they are old enough to have their own account. This is simpler than managing two accounts, though the interest is reported on your tax return, not the child's.

If teaching the child about money and saving is your goal, a high-yield account in their name — even if you control it — sends a clearer message that the money is theirs and is working for them. The interest they earn, even if it is small, shows them how money grows over time.

Frequently Asked Questions

Can my child withdraw money from the account whenever they want?

It depends on the bank and the child's age. Some banks let the child withdraw money if they are 13 or older and the parent has set up online access. Others require the parent to make all withdrawals. Ask the bank about this before you open the account, and decide together with your child what the rules will be.

What happens to the account if the parent dies?

The account becomes part of the parent's estate. The executor or heir will need to contact the bank and provide a death certificate. The bank will then transfer the account to the child's name or to the child's guardian, depending on the state and the parent's will. This can take several weeks.

Does opening a high-yield account hurt the child's credit?

No. Savings accounts do not appear on credit reports. Opening one will not help or hurt the child's credit score. Credit scores are built from borrowing and repaying loans, not from saving money.

Can the child have their own debit card for the account?

Some banks offer debit cards for minor accounts, others do not. If the bank does offer one, the parent usually controls whether the card is active and can set spending limits. Ask the bank whether a debit card is available and what the rules are for using it.

What if I want to move the account to a different bank later?

You can transfer the money to a new bank at any time by opening a new account and moving the balance over. This takes a few business days. The old account will close once the money is gone. There is no penalty for moving, though you may lose a few days of interest during the transfer.