What you need to open a child's savings account

A child's savings account requires an adult to open it and manage it until the child reaches the age of majority (usually 18). You will need your own government-issued ID, proof of address, and the child's Social Security number or tax ID. Some banks also ask for the child's birth certificate, though not all require it.

The account itself is straightforward: you choose a bank or credit union, bring the documents, and sign paperwork that names you as the custodian or joint account holder. The child's name goes on the account, but you control the money until they turn 18 or until the account converts to an adult account under your bank's rules.

Different institutions have different minimums. Some require no opening deposit at all. Others ask for $25 to $100. A few waive minimums if you set up automatic transfers from another account you hold at the same bank. Call ahead or check the bank's website to confirm what that specific branch needs.

Key Takeaways

  • You need your ID, proof of address, and the child's Social Security number; some banks also ask for a birth certificate.
  • You open the account in your name and the child's name together, with you as the custodian or joint owner until age 18.
  • Minimum opening deposits range from zero to $100 depending on the bank; many waive minimums for automatic transfers.
  • A child's account typically earns less interest than an adult account, but some credit unions and online banks offer competitive rates.
  • The account converts to an adult account automatically when the child reaches the bank's stated age, usually 18 or 21.

Custodial accounts versus joint accounts

Banks offer two main structures for children's accounts. A custodial account (sometimes called a UTMA or UGMA account) is held in the child's name, with you as the custodian. The money legally belongs to the child, but you manage it. When the child turns 18 or 21, depending on your state and the account type, the account becomes theirs to control fully, and you lose access.

A joint account is held in both your names equally. You both can deposit and withdraw money. The account does not automatically transfer to the child at any age—you stay on it unless you remove yourself. Joint accounts are simpler to set up and more flexible, but they blur the line between your money and the child's money, which can complicate taxes and financial aid later.

For most families saving for a child's future, a custodial account makes more sense because it keeps the money legally separate and teaches the child that the account is theirs. A joint account works better if you want to manage the child's money day-to-day—for instance, if you are depositing their allowance or earnings and letting them withdraw for specific purchases.

Where to open the account

Traditional banks, online banks, and credit unions all offer children's savings accounts. Traditional banks have physical branches where you can walk in with documents and open an account the same day. Online banks have no branches but often have lower fees and sometimes higher interest rates; you open the account entirely online, though you may need to mail in documents or verify your identity through video.

Credit unions often have the lowest fees and competitive interest rates, but you must be a member first. Membership usually requires living or working in a specific area, belonging to an employer, or being related to an existing member. If you already belong to a credit union, check whether they offer youth accounts—many do, and they often have no monthly fees.

The choice depends on what matters to you: convenience (a nearby branch), interest rate (online banks and some credit unions), or low fees (credit unions and some online banks). Compare the monthly maintenance fee, the interest rate the account earns, and any minimum balance requirements. A few institutions waive fees entirely for accounts under $500 or for accounts opened by minors.

Documents to bring and what happens next

Bring your government-issued ID (driver's license, passport, or state ID), a recent utility bill or lease showing your current address, and the child's Social Security number. If the bank asks for a birth certificate, bring that too. Some banks accept a copy of the Social Security card instead of the number alone, though the number is usually sufficient.

The bank will run a background check on you (standard for all new accounts) and verify the child's Social Security number. This takes a few minutes in person or a few hours to a few days online. Once approved, the account opens when ready in person or within one to three business days online. You receive a debit card (if the account includes one), a checkbook (rarely), and online access.

The account is ready to use as soon as it opens. You can deposit money by transferring from another account, depositing a check, or adding cash at a branch. Some banks mail a debit card to the child; others mail it to you. Check the bank's policy on whether the child can use the card independently or whether you must authorize each transaction.

Interest rates and account features

Most children's savings accounts earn interest, but the rate is usually lower than adult accounts at the same institution. As of now, rates vary widely: some accounts earn 0.01% annual percentage yield (APY), while others earn 4% to 5% APY. Online banks and credit unions tend to offer higher rates than traditional banks.

The difference matters if you are saving a larger amount or over several years. A $1,000 deposit earning 0.01% APY grows by $0.10 per year. The same deposit at 4% APY grows by $40 per year. Over ten years, that gap widens significantly. Check the current rate before opening—rates change frequently, and comparing three or four institutions takes 15 minutes.

Some children's accounts include a debit card, online banking, and mobile app access. Others are savings-only, with no card and no way to withdraw except at a branch or by transferring to another account. Decide whether the child will need to withdraw money themselves or whether you will handle all transactions. A savings-only account can help teach delayed gratification; a debit card gives the child more independence.

Tax reporting and what the child needs to know

Interest earned in a custodial account is taxable income to the child. If the interest is under $1,300 per year (the 2024 standard), it is usually not taxable because of the child's standard deduction. Above that, you must report it on the child's tax return. The bank sends a 1099-INT form each January showing the interest earned.

This matters less for small savings accounts but becomes important if you are depositing large amounts or the account earns significant interest. Talk to a tax professional if the account will earn more than $1,000 per year in interest, because the tax treatment can affect financial aid for college later.

Tell the child what the account is for and how it works, even if they are young. A five-year-old can understand "this is your money, and it grows when you don't spend it." A ten-year-old can learn about interest. A teenager can see the statements and understand how deposits and interest add up. The account is a teaching tool as much as a savings tool.

What happens when the child turns 18

Most banks automatically convert a custodial account to an adult account when the child reaches 18 or 21, depending on the bank's policy. You lose access to the account at that point, and the child becomes the sole owner. The bank sends a notice before the conversion happens, usually 30 to 60 days in advance.

Some banks require the child to visit a branch or confirm the conversion online. Others do it automatically with no action needed. Check your bank's policy now so you know what to expect. If you want to keep managing the account after the child turns 18, you will need to open a new joint account together, which requires the child's consent.

The transition is a good moment to talk about money management. The child now controls the account, can set their own savings goals, and is responsible for keeping the account open and in good standing. Many banks offer financial literacy resources for young adults—ask whether yours does.

Frequently Asked Questions

Can I open a savings account for a child without their Social Security number?

No. Banks are required by law to verify the child's identity using a Social Security number or Individual Taxpayer Identification Number (ITIN). If the child does not have a Social Security number yet, you can explore for one at the Social Security Administration office or online. The process takes about two weeks.

What if I want the child to have access to the account but not be able to spend all the money at once?

Some banks offer accounts with restrictions—for instance, a limit on how much can be withdrawn per month or per day. Ask your bank whether they offer this feature. Alternatively, a custodial account naturally restricts access because you control the money until the child turns 18, giving you time to teach spending habits before they have full control.

Can I open an account for a grandchild or niece if I am not their parent?

Yes, but the rules vary by bank. Some require a parent or legal guardian to be present or to sign consent forms. Others allow any adult to open a custodial account for any child. Call the bank ahead of time to confirm their policy. You will still need your ID, proof of address, and the child's Social Security number.

Does a child's savings account affect their credit score?

No. Savings accounts do not appear on credit reports and do not affect credit scores. Only credit products—credit cards, loans, and lines of credit—build credit history. A savings account teaches financial habits but does not build credit on its own.

What happens to the account if I die before the child turns 18?

The money in the account belongs to the child, not to you, so it does not go through your estate. However, the child cannot access it without a custodian. Name a backup custodian in your will or ask the bank whether they allow you to designate one. If no custodian is named, a court may appoint one, which can delay access to the money.