Yes, you can open a savings account for a minor, but the account structure depends on the child's age and the bank's rules

Most banks and credit unions allow you to open a savings account for a child under 18, but you will be the account owner until the child reaches the age of majority (usually 18). The account is called a custodial account or UTMA/UGMA account, depending on the state and the financial institution. You control the money and the account decisions until the child turns 18 or 21, at which point the account transfers to them.

Some banks have minimum age requirements — many will not open an account for a child under 13 without a parent or guardian present. A few institutions have no age minimum at all. The rules vary by bank, so calling ahead or checking the bank's website saves a trip.

The account works like any other savings account: money earns interest, you can deposit and withdraw funds, and the child can see the balance grow. The main difference is that you make all the decisions about deposits, withdrawals, and account management until the child comes of age.

Key Takeaways

  • You can open a custodial savings account for a minor at most banks and credit unions, and you remain the account owner until the child turns 18 or 21.
  • Bring a government-issued ID, proof of address, and the child's Social Security number to open the account in person.
  • Some banks allow you to open an account online without the child present, while others require both the parent and child to be there.
  • The account transfers to the child's full control when they reach the age of majority, which is 18 in most states but can be 21 at some institutions.
  • Interest earned on the account may have tax implications, so check with a tax professional about reporting requirements.

What documents you need to bring

To open a custodial account, bring your government-issued photo ID (driver's license or passport), proof of your current address (a recent utility bill or bank statement), and the child's Social Security number. Some banks also ask for the child's birth certificate, though this is less common.

If you are opening the account online, you may be able to upload photos of these documents instead of bringing originals. If you are opening it in person, bring the originals or certified copies. Call the bank ahead of time to confirm what they need — requirements vary by institution.

Whether the child needs to be present

This depends on the bank. Some banks require both the parent and child to be present at the branch, especially if the child is old enough to sign documents. Others allow you to open the account as the sole owner without the child there at all. A few banks offer online account opening for custodial accounts, which means you can complete the process from home.

If the bank requires the child to be present, they typically do not need to sign anything — you sign as the account owner. The child's presence is mainly for verification purposes. Ask the bank whether the child needs to come in before you schedule an appointment.

How the account transfers when the child turns 18

When the child reaches the age of majority (18 in most states, 21 at some banks), the account automatically converts to a regular account in the child's name alone. You lose access and control at that point. The bank will notify you and the child before this happens, usually 30 to 60 days in advance.

The child does not have to do anything for the transfer to happen — it is automatic. However, they may need to visit the bank or call to confirm their contact information and set up online banking access if they have not already done so. The money stays in the account throughout the transition.

Tax reporting for interest earned

Interest earned on a custodial savings account is taxable income. If the account earns more than a certain amount of interest in a year (the threshold changes annually), the bank will send a 1099-INT form to you and the child. You may need to report this on your tax return, depending on your situation and the amount earned.

The tax rules for custodial accounts can be complex, especially if the child has other income. A tax professional can advise you on whether you need to file a separate return for the child or report the interest on your own return. It is worth asking about this before you open the account, so you understand the tax picture from the start.

Differences between banks and credit unions

Banks and credit unions both offer custodial savings accounts, but the details differ. Credit unions often have lower or no minimum balance requirements, and they may offer higher interest rates on savings. Banks tend to have more branches and online features, which can make deposits and withdrawals easier.

Some online banks offer custodial accounts with no monthly fees and competitive interest rates, but they do not have physical branches. If you want to deposit cash regularly, a bank or credit union with a branch near you may be more convenient. Compare the interest rate, fees, minimum balance, and ease of access before you decide.

What happens if you need to withdraw money before the child turns 18

As the account owner, you can withdraw money from a custodial account at any time for any reason. There are no restrictions on your access. However, if the account was opened under UTMA or UGMA rules (which vary by state), the money is legally considered the child's property, even though you control it. Withdrawing money for your own personal use may have legal or tax consequences depending on your state's laws.

The safest approach is to use withdrawals only for expenses that directly benefit the child — education, medical care, housing, or other necessities. If you are unsure whether a withdrawal is appropriate, ask a lawyer or accountant familiar with your state's rules.

Frequently Asked Questions

Can I open a savings account for a child I am not the parent of?

This depends on the bank and your relationship to the child. Grandparents, aunts, uncles, and legal guardians can usually open custodial accounts. You will need to prove your legal relationship to the child or your guardianship status. Call the bank to ask what documentation they need.

What is the difference between a custodial account and a trust account?

A custodial account is simpler and faster to open — you just need an ID and the child's Social Security number. A trust account requires a formal legal document and is more complex to set up. For most families, a custodial account is sufficient. A trust is useful if you have specific wishes about how the money is used after you die.

Can the child access the account before they turn 18?

Not without your permission. You control all access until the child reaches the age of majority. Some parents give their older children a debit card linked to the account to teach money management, but this is optional and entirely your choice.

Do I need to report the custodial account to the government?

You do not need to report the account itself, but you will report interest earned on it when you file taxes. If the account is very large and you are receiving government benefits, it may count as an asset and affect your benefit amount. Ask your benefits administrator if you are unsure.

What happens if the child wants to close the account after they turn 18?

Once the account is in the child's name alone, they can close it whenever they want. You have no say in the decision. If you want the money to stay invested or saved, discuss this with the child before they turn 18, but understand that they have the legal right to do what they want with their own money.