You cannot open a checking account in a baby's name alone, but you can open one as a custodian

A baby cannot sign documents or make decisions about money, so banks will not open an account in their name by themselves. What you can do is open a custodial checking account — an account held in your child's name but controlled by you as the parent or guardian until they reach the age of majority (usually 18 or 21, depending on your state).

The account belongs to your child legally, which means the money is theirs and counts as their asset if they ever need to show financial information for school aid or other programs. But you manage it, make deposits and withdrawals, and decide how it is used until they are old enough to take over.

Some families open these accounts to teach children about money early, to hold money from relatives, or to set aside funds for a specific purpose. Others use them as a stepping stone before opening a regular account the child can manage themselves.

Key Takeaways

  • A custodial checking account is opened in your child's name but managed by you until they reach the age of majority in your state.
  • You will need your child's Social Security number and your own identification to open the account at most banks.
  • Not all banks offer custodial accounts, so you may need to call ahead or visit a branch to ask what options they have.
  • Once your child turns 18 or 21 (depending on your state), the account automatically converts to a regular account they control themselves.
  • A custodial account teaches children about banking and saving, but the money is legally theirs and may affect their may be able to access for certain financial aid.

What you need to open a custodial account

Bring your child's Social Security number and your own government-issued ID (a driver's license or passport). Some banks also ask for a second form of ID or proof of address, such as a utility bill or lease.

You will also need to decide what type of account you want. Most banks offer a basic custodial checking account with a debit card, though some have savings accounts or combined accounts. Ask the bank what options they have and whether there are monthly fees — some waive fees for custodial accounts, and others charge a small amount.

If your child is very young, you may be the only person who can access the account. As they get older, you can usually add them as an authorized user so they can make withdrawals and see the balance, though you remain in control until the account converts.

Which banks offer custodial accounts

Most large national banks offer custodial checking accounts, including Bank of America, Chase, Wells Fargo, and Citibank. Credit unions often have them as well. However, not every branch or every bank has the same products, so call ahead or visit in person to ask.

Online banks vary — some offer custodial accounts and some do not. If you are considering an online bank, check their website or call their customer service line to confirm they have this option before you visit.

Community banks and local credit unions may have custodial accounts tailored to families in your area. If you already bank somewhere, ask whether they offer them and what the terms are.

What happens when your child turns 18 or 21

The age at which a custodial account converts to a regular account depends on your state. In most states it is 18, but some states use 21. The bank will tell you the conversion age when you open the account.

When your child reaches that age, the account automatically becomes theirs to control. You lose access unless they add you as an authorized user. The bank will usually send a notice before the conversion happens so you are not surprised.

Your child does not have to do anything — the conversion is automatic. However, if they want to change the account type, add a debit card, or set up online banking, they can do that once they have control.

How a custodial account affects financial aid and taxes

Money in a custodial account counts as your child's asset when they fill out the Free process for Federal Student Aid (FAFSA) for college. This can reduce the amount of aid they are offered, because the government assumes your child should use their own savings first.

The impact varies depending on how much is in the account and what other assets your family has. If you are planning to save a large amount for college, talk to a tax professional or financial advisor about whether a custodial account is the best choice, or whether a 529 college savings plan might work better for your situation.

Interest or dividends earned in the account may be taxable to your child. The bank will send a tax form (usually a 1099) if the earnings are above a certain amount. Your tax preparer can tell you whether you need to file a return for your child.

Teaching your child to use the account

Once your child is old enough to understand money — usually around age 8 or 9 — you can start letting them see the account balance and make small withdrawals. This teaches them how deposits and withdrawals work before they have to manage the account alone.

Some families give their child a debit card linked to the account once they are around 10 or 11, with rules about what they can spend on. Others wait until the child is a teenager. There is no single right age — it depends on your child's maturity and your family's approach.

Before the account converts to their control, sit down with your child and explain how to check the balance, how to use the debit card, and what happens if they overdraw. Many banks offer free financial education for teens, so ask whether yours does.

Alternatives to a custodial checking account

If you want to save money for your child but do not want it to count as their asset for financial aid purposes, a 529 college savings plan is an option. The money is in your name, not your child's, so it does not affect FAFSA calculations the same way. However, 529 plans are designed for education expenses and have rules about how the money can be used.

A Uniform Transfers to Minors Act (UTMA) account or Uniform Gifts to Minors Act (UGMA) account is another way to hold money for a child. These are investment accounts rather than checking accounts, and they work similarly to custodial checking accounts — you control them until your child reaches the age of majority. They are useful if you want to invest the money rather than keep it in a checking account.

You can also straightforward keep money in your own account and set it aside mentally for your child, though this does not teach them about banking or give them legal ownership of the funds.

Frequently Asked Questions

Do I need my baby's Social Security number to open a custodial account?

Yes. The bank needs your child's Social Security number to open the account and report any interest earned to the IRS. If your child does not have a Social Security number yet, you can get one from the Social Security Administration — you can explore at the hospital when your baby is born, or later at your local Social Security office.

Can I add money to my child's custodial account from relatives?

Yes. Grandparents, aunts, uncles, or anyone else can deposit money into the account. They just need the account number. Some families use custodial accounts specifically to hold money from relatives as gifts.

What happens if I need to use the money in the account for something other than my child?

Legally, the money belongs to your child, not to you. Using it for your own expenses is considered misuse of the account. If you need to save money for your child but want to keep it separate from your own finances, a custodial account is the right tool. If you need access to your own funds, keep them in your own account instead.

Can my child have more than one custodial account?

Yes. Your child can have custodial accounts at different banks, or a custodial checking account and a custodial savings account at the same bank. However, there is usually no reason to open more than one unless you are using them for different purposes — for example, one for everyday spending and one for long-term savings.

What if I want to close the custodial account before my child turns 18?

You can close it at any time. The money goes to you as the custodian, and you can give it to your child, keep it, or use it as you see fit. However, closing the account does not change the fact that the money legally belongs to your child, so think carefully before doing this.