A kids' bank account is a real account at a real bank, usually opened by a parent or guardian, that teaches a young person how money works while keeping their deposits safe
Most kids' accounts are savings accounts or checking accounts tied to a parent's account. The parent controls the account until the child reaches the age of majority (usually 18), though the child can see the balance and sometimes make withdrawals. The bank insures the money through the FDIC up to $250,000, so the funds are protected if the bank fails.
The account belongs to the child, not the parent—the parent is a custodian, meaning they manage it on the child's behalf. When the child turns 18, the account typically converts to a standard adult account, and the parent's control ends. Some banks let you set up accounts for children as young as newborns; others require the child to be at least 13.
Key Takeaways
- A kids' account is a real bank account held in the child's name with a parent or guardian as custodian, insured by the FDIC just like an adult account.
- Most kids' accounts charge no monthly fee, have no minimum balance requirement, and pay little to no interest on savings.
- The parent can deposit money, set withdrawal limits, and see all transactions, but the account belongs to the child and converts to a standard account at age 18.
- Checking accounts for kids often come with a debit card and online banking; savings accounts focus on teaching the habit of saving rather than spending.
- The account does not affect the child's credit score and does not require a Social Security number in the child's name alone—the parent's SSN is usually sufficient.
Savings accounts versus checking accounts for children
A savings account for a child is designed to hold money and build the habit of saving. Deposits stay in the account and earn interest (though the rate is usually very low, often under 0.01% per year). The child can withdraw money, but the account typically limits withdrawals to a certain number per month—often six—before a fee applies. This structure discourages frequent spending and reinforces the idea that savings are meant to stay put.
A checking account for a child works more like an adult checking account. It usually comes with a debit card and online banking access, so the child can spend money whenever they want. There are no withdrawal limits. Checking accounts for kids often charge no monthly fee and require no minimum balance, but they also pay no interest. Some banks pair a kids' checking account with a savings account, letting the child move money between the two.
The choice depends on what you want to teach. A savings account works well for a younger child or one who receives money as gifts and needs to learn not to spend it all at once. A checking account works better for a teenager who earns money through a job or chores and needs to manage a budget and make everyday purchases.
How a parent controls a kids' account
When you open a kids' account, you provide your own identification and Social Security number. The bank creates the account in the child's name but links it to your account as the custodian. You can log into online banking and see every deposit, withdrawal, and fee. Most banks let you set daily spending limits on a debit card, so a child cannot withdraw or spend more than you allow.
You decide what money goes into the account—whether it is an allowance, birthday gifts, earnings from chores, or money the child earns from a job. You can also withdraw money yourself if needed, though doing so regularly defeats the purpose of teaching the child to manage their own money. Some banks let you set up automatic transfers, so a set amount moves from your account to the child's account on a schedule.
The parent's control is complete until the child reaches the age of majority. At that point, the account converts to a standard adult account, the parent's name comes off, and the child takes full control. Some banks send a notice before this happens; others do it automatically. Check with your bank about the exact process.
Fees, interest, and minimum balances
Most banks charge no monthly maintenance fee on kids' accounts, and many have no minimum balance requirement. This makes them affordable even if the child's balance is very small. However, some banks do charge fees for certain actions—overdrafts (spending more than the balance), excessive withdrawals from a savings account, or using an out-of-network ATM.
Interest rates on kids' savings accounts are typically very low, often between 0.01% and 0.05% per year. This means a child with $100 in the account might earn less than a dollar in interest over a year. The purpose of a kids' account is not to build wealth through interest but to teach the habit of saving and to keep money safe. If you want higher interest, some online banks and credit unions offer slightly better rates on kids' accounts, though the difference is still small.
Before opening an account, ask the bank about all possible fees and what triggers them. Read the fee schedule carefully, because some banks charge for things like paper statements or closing the account early.
What information you need to open an account
To open a kids' account, you will need your own government-issued ID and Social Security number. You will also need the child's full name and date of birth. Some banks ask for the child's Social Security number, but many do not require it—your SSN is often sufficient for the account to be opened and insured.
You may need to bring a birth certificate or other proof of the child's identity and age, depending on the bank. Some banks let you open an account online; others require you to visit a branch in person. A few banks have age restrictions—some will not open an account for a child under 13, while others will open one for a newborn if a parent is the custodian.
If the child is old enough to sign their name, some banks ask them to sign the account agreement. This is not a legal requirement but a way to involve the child in the process and make them feel ownership of the account.
How the account affects taxes and financial aid
Money in a kids' account belongs to the child, not the parent. If the account earns interest or the child earns income and deposits it, the child may owe taxes on that income. For most kids' accounts, the interest earned is so small that it does not trigger a tax filing requirement. However, if a child has a job and earns more than a certain amount (the threshold changes each year), they must file a tax return.
A kids' account can affect financial aid for college. When a family fills out the FAFSA (Free Application for Federal Student Aid), student assets—including money in a kids' account—are counted as resources available to pay for college. Parent assets are counted at a lower rate. This means having money in a child's account may reduce the amount of need-based financial aid the student receives. If you are planning to save for college, talk to a financial advisor or tax professional about whether a kids' account or a different savings vehicle makes sense for your situation.
Moving money in and out of the account
You can deposit money into a kids' account the same ways you deposit into your own account: by transferring money from your bank account online, by mailing a check, by depositing cash at a branch, or by setting up automatic transfers. Many banks let you link the kids' account to your own account so transfers are instant and free.
The child can withdraw money by using a debit card (if the account comes with one), by visiting a branch and asking a teller, or by transferring money online if the account has online banking access. If the child is very young, they will need you to help with withdrawals. As they get older, they can manage withdrawals themselves, though you can still see all transactions and set limits.
When the child turns 18 and the account converts to an adult account, they can withdraw all the money or leave it in the account. There is no requirement to close the account or move the money elsewhere.
Frequently Asked Questions
Can a child have a bank account without a parent?
No. A child under 18 cannot open a bank account alone. A parent or legal guardian must open the account and be listed as the custodian. Once the child turns 18, they can open their own account without a parent's involvement.
Does a kids' account build the child's credit score?
No. A kids' account is a savings or checking account, not a credit product. It does not appear on the child's credit report and does not affect their credit score. Credit scores are built through borrowing and repaying loans, credit cards, or other credit products.
What happens to the account when the child turns 18?
The account automatically converts to a standard adult account, and the parent's name and custodial rights are removed. The child takes full control of the account and all the money in it. The bank usually sends a notice before this happens, but the exact process varies by bank.
Can I use a kids' account to give money to my child without it being a gift for tax purposes?
No. Money you put into a kids' account is a gift to the child. There are no special tax rules that change this based on how the money is held. If you are concerned about gift taxes or want to structure money transfers in a specific way, talk to a tax professional.
What if my child loses the debit card?
Contact the bank immediately and ask them to freeze or cancel the card. Most banks can issue a replacement card within a few business days. Until the new card arrives, the child can still withdraw money at a branch or through online banking if the account has that feature.