Yes, children can have bank accounts, but the account structure depends on their age

A child under 18 can hold a bank account in their own name, but a parent or guardian must open it and retain legal control until the child reaches the age of majority (usually 18, sometimes 21 depending on the state and bank). The account belongs to the child—the money is theirs, not the parent's—but the parent has signing authority and can see all transactions.

Banks call these custodial accounts or minor accounts. They work like regular checking or savings accounts: the child gets a debit card, can make deposits and withdrawals, and earns interest on savings. The main difference is that a parent or guardian must be listed on the account as the custodian, and the account automatically converts to a standard adult account once the child reaches the age of majority.

Some banks also offer teen accounts, which are custodial accounts with built-in controls—spending limits, parental notifications when the card is used, or restrictions on certain types of transactions. These are designed for teenagers who are ready to manage money but not yet independent.

Key Takeaways

  • A parent or guardian must open the account and remain the custodian until the child reaches 18 or 21, depending on state law and the bank.
  • The money in the account belongs to the child, but the parent has legal control and can see all activity until the account converts to an adult account.
  • Most banks allow children as young as 13 to have a debit card linked to a custodial account, though some require the child to be older.
  • Teen accounts often include parental controls like spending limits and transaction alerts, which convert or disappear when the child reaches adulthood.
  • The account will automatically transfer to a standard adult account when the child reaches the age of majority, and the parent's custodial authority ends.

What happens when you open a custodial account

To open a custodial account, the parent or guardian visits a bank branch or applies online with the child's Social Security number and proof of identity for both the adult and the child. The bank will ask for the child's date of birth and will verify that the adult has legal custody (usually a birth certificate or custody order is sufficient, though requirements vary by bank).

Once the account is open, the parent receives a debit card in the child's name and can set up online banking access. Some banks allow the child to have their own login to view the account; others restrict the child's access until a certain age. The parent always retains full access and can transfer money in or out, set spending limits, and monitor transactions.

The account number and routing number work exactly like an adult account. The child can receive direct deposits (from a job, for example), and the parent can set up automatic transfers. Interest rates on savings accounts are the same as they would be for an adult, though they are typically very low across most banks.

Age requirements and what each bank allows

Banks set their own minimum age for custodial accounts. Most allow accounts for children as young as birth, though a debit card typically cannot be issued until the child is at least 13. Some banks require the child to be 16 or older before issuing a card.

A few banks—including some online-only banks—do not offer custodial accounts at all and require the child to be 18 to open an account independently. If you are looking for a specific bank, call their customer service line or check their website for "minor account" or "teen account" to confirm they offer this product and what age they require.

The age at which the account automatically converts to an adult account varies. Most banks convert at 18, but some wait until 21. When the conversion happens, the parent's custodial authority ends, and the child becomes the sole owner. The parent can no longer see transactions or make changes to the account without the child's permission.

How custodial accounts affect taxes and financial aid

Money in a custodial account is the child's asset for tax purposes. If the account earns interest or the child receives income (from a job, for example), that income may be taxable. The bank will send a 1099-INT form if interest exceeds a certain threshold, and the child's parent will need to report it on their tax return.

For federal student aid purposes, money in a custodial account counts as the student's asset, not the parent's. This means it can reduce the amount of financial aid the student is considered to need. The impact is significant: student assets are assessed at a higher rate than parent assets when calculating aid. If you are saving for college, a custodial account may not be the most tax-efficient choice; a 529 plan or Coverdell ESA may be better options, though those have their own rules and limits.

Spending limits and parental controls

Teen accounts often come with built-in controls that a parent can adjust. Common features include daily spending limits (for example, $50 per day), restrictions on certain types of transactions (like online purchases or ATM withdrawals), and notifications sent to the parent's phone or email when the card is used.

These controls are optional—the parent can turn them on or off. Some banks allow the parent to set different limits for different types of spending, or to temporarily freeze the card if it is lost. When the account converts to an adult account, these controls typically disappear, and the young adult has full control over their money.

Not all banks offer these features. Standard custodial accounts may not have any built-in controls beyond what the parent can do manually (like transferring money out or closing the account). If parental controls are important to you, check whether the bank's teen account product includes them before opening the account.

What happens to the account when the child turns 18

On the date the child reaches the age of majority (usually 18, sometimes 21), the account automatically converts to a standard adult account. The parent's name is removed from the account, and the parent loses all access. The child becomes the sole owner and can do whatever they want with the money—the parent cannot see transactions, cannot withdraw funds, and cannot close the account.

This conversion happens automatically; neither the parent nor the child has to do anything. The account number and routing number usually stay the same, so any direct deposits or automatic payments linked to the account will continue without interruption. The debit card may need to be reissued in the child's name only, depending on the bank.

If the parent wants to discuss the account after the conversion, they will need the child's permission. Some young adults choose to keep their parent on the account as an authorized user, but that is a separate decision and requires the young adult to request it.

Alternatives to custodial accounts

A savings bond or 529 plan is another way to save money for a child, though these are designed for long-term savings rather than day-to-day spending. A 529 plan offers tax advantages for education expenses, but the money can only be used for may have access to education costs without a penalty.

A Uniform Transfers to Minors Act (UTMA) account or Uniform Gifts to Minors Act (UGMA) account is a custodial account with a specific legal structure. These accounts have different tax treatment and rules about what happens to the money when the child reaches adulthood—the money automatically becomes the child's property, and the parent has no further control. Not all banks offer UTMA or UGMA accounts; these are more common at investment firms and brokerages.

If you want the child to have spending money but do not want to open a bank account, you can also give the child cash or use a prepaid card (though prepaid cards do not build a banking history and do not earn interest).

Frequently Asked Questions

Can a child open a bank account without a parent?

No. A child under 18 cannot open a bank account on their own. A parent or legal guardian must open the account and remain the custodian. Once the child reaches 18 or 21 (depending on the bank and state), they can open their own account independently.

Can a parent take money out of a child's custodial account?

Yes, legally the parent can withdraw money from a custodial account because the parent has signing authority. However, the money belongs to the child, and taking it for the parent's own use is legally considered a misuse of the account. The money should only be used for the child's benefit or with the child's permission.

What happens if a child's account has money in it when they turn 18?

The money stays in the account. When the account converts to an adult account, the balance transfers with it. The young adult now owns the money outright and can spend it however they want. The parent has no claim to it and cannot access it.

Do custodial accounts build credit for the child?

No. A custodial checking or savings account does not appear on the child's credit report and does not build credit history. Credit is built through credit cards, loans, or other credit products. A debit card linked to a custodial account is not a credit product, so it does not help or hurt credit.

Can a child have more than one bank account?

Yes. A child can have multiple custodial accounts at different banks, or a custodial checking account at one bank and a savings account at another. There is no legal limit on the number of accounts. Some parents open separate accounts for different purposes (one for spending, one for savings, one for a specific goal like a car).