Yes, you can open a bank account for your baby, but the account will be in your name as the custodian

You can open a savings account for your child at any age, including infancy. The account belongs to your child legally, but you control it until they reach the age of majority—usually 18 or 21, depending on your state and the account type. The bank will require your Social Security number and your child's Social Security number (or tax ID), a form of ID for you, and proof of address.

The most common structure is a custodial account or Uniform Transfers to Minors Act (UTMA) account. You deposit money, manage the account, and make withdrawals on your child's behalf. When your child turns 18 or 21, the account transfers to them automatically, and they gain full control. At that point, you no longer have authority over the funds.

Some parents also open a joint account with their child's name on it, though this is less common for infants since the child cannot sign documents. A custodial account is simpler and clearer about who controls the money during childhood.

Key Takeaways

  • You need your child's Social Security number and your own ID and proof of address to open an account; you can start at any age, including birth.
  • A custodial account is the standard structure—you control the money until your child reaches 18 or 21, then it becomes theirs automatically.
  • Most banks offer custodial savings accounts with no minimum balance, though some credit unions and online banks have lower fees.
  • Money in a custodial account counts as your child's asset for financial aid purposes, which may reduce aid may be able to access later.
  • You cannot withdraw the money for your own use; it must be spent for your child's benefit, though that definition is broad.

What you need to open the account

Bring your government-issued ID (driver's license or passport), proof of your current address (a utility bill or lease dated within the last 60 days), your Social Security number, and your child's Social Security number. If your child does not yet have a Social Security number, you can request one at the hospital after birth, or explore through the Social Security Administration website. Many banks will let you open the account and add the child's number later, but confirm this before you go in.

Some banks also ask for the child's birth certificate as proof of age and identity, though this is less common. Call ahead to ask what your specific bank requires. Online banks typically have the same requirements but let you upload documents instead of visiting a branch.

Custodial accounts versus joint accounts

A custodial account is registered in your child's name with you listed as custodian. The money is legally your child's from day one. You manage it, but you cannot use it for yourself. When your child turns 18 or 21 (depending on state law and account type), the account transfers to them automatically, and you lose all control. This is the cleanest option for most families because it is clear that the money belongs to the child.

A joint account has both your name and your child's name on it. You both own the money, and either of you can withdraw it. This sounds simpler, but it creates problems: the money counts as yours for tax purposes, it may affect your own financial aid or bankruptcy proceedings, and your child has legal access to the funds even before they turn 18 (though many banks require you to authorize withdrawals). Joint accounts are rarely the best choice for saving for a child's future.

A 529 education savings plan is a separate option if you are saving specifically for college. You own the account, but the money is earmarked for education expenses. It has tax advantages that a regular savings account does not, but the money must be used for school or you pay penalties on the earnings. This is worth exploring if education savings is your main goal.

Where to open the account

Most banks, credit unions, and online financial institutions offer custodial savings accounts. Traditional banks (Chase, Bank of America, Wells Fargo) have branches everywhere but often charge monthly fees unless you maintain a minimum balance. Credit unions typically have lower fees and higher interest rates, but you must be a member or live in their service area. Online banks (Marcus, Ally, Discover) usually have no monthly fees, no minimum balance, and higher interest rates, but you cannot deposit cash in person.

Compare the interest rate, monthly fees, minimum balance requirements, and whether you can deposit money online or only by transfer. For a baby's account, you will likely be the only one depositing money, so online access and low fees matter more than branch locations.

How the money is taxed

Interest earned in a custodial account is taxed as your child's income, not yours. This is actually an advantage: your child likely has no other income, so the first portion of interest is tax-free. For 2024, a dependent child owes no federal income tax on the first $1,450 of unearned income (interest, dividends). Above that, the income is taxed at your child's rate, which is usually lower than yours.

You do not report the account on your tax return. Your child's name and Social Security number are on the account, so the bank sends a 1099-INT form directly to your child (or to you if your child is very young) showing the interest earned. If the interest exceeds $1,450, you will need to file a tax return for your child, but this is rare in a savings account.

Impact on financial aid and other considerations

Money in a custodial account counts as your child's asset when they later explore for federal student aid (FAFSA). Assets in the student's name reduce aid by up to 20 percent of the asset value per year. This means a $10,000 custodial account could reduce financial aid by up to $2,000 per year. If you expect your child to receive need-based aid, you may want to discuss this with a financial planner before opening a large custodial account.

Money in a custodial account is also protected from your creditors in most states—it belongs to your child, not to you. However, it is not protected from your child's creditors if they face legal judgment as an adult. Once the account transfers to them at 18 or 21, it becomes their asset with no special protection.

You cannot use custodial account money to pay for ordinary parenting expenses like groceries or rent. The money must be spent for your child's benefit—education, medical care, activities, or other direct expenses. Spending it on yourself is a breach of your duty as custodian. In practice, this is rarely enforced unless there is a dispute with your child later, but it is the legal rule.

What happens when your child turns 18 or 21

The account transfers automatically to your child on their 18th or 21st birthday, depending on your state and the account type. You receive no notice and have no say in the matter. Your child can then withdraw the money for any reason—college, a car, travel, or anything else. You cannot prevent this transfer or require them to use the money for a specific purpose.

If you want more control over how the money is used after your child reaches adulthood, a custodial account is not the right tool. A trust, set up with an attorney, gives you more flexibility to specify how and when money can be spent. But a trust is more expensive to set up and maintain than a straightforward savings account.

Frequently Asked Questions

Can I open a custodial account if my baby doesn't have a Social Security number yet?

Many banks will let you open the account with your child's name and your Social Security number, then add their Social Security number once you receive it. Call your bank first to confirm. If you are born in the hospital, you can request a Social Security number on the birth certificate process, and it usually arrives within two weeks.

What if I need to withdraw money from my child's account for an emergency?

You can withdraw the money, but it must be for your child's benefit—medical bills, education, activities, or other direct expenses. You cannot use it for your own bills or living expenses. In practice, "benefit" is interpreted broadly, but the legal rule is that the money belongs to your child, not to you.

Will opening a custodial account affect my taxes or benefits?

The account does not appear on your tax return. Interest earned is taxed to your child. If you receive means-tested benefits (SNAP, housing information, Medicaid), a custodial account may count as your child's asset and could affect your benefit amount—check with your benefits administrator. For most families, the impact is small.

Can I change my mind and close the account before my child turns 18?

You can close the account and withdraw the money, but it must be for your child's benefit. You cannot close it and spend the money on yourself. If you want to move the money to a different account or institution, you can do that at any time.

What happens if my child doesn't want the money when they turn 18?

Once the account transfers to them, it is their decision. They can leave it in the bank, withdraw it, spend it, or invest it. You have no control and no say. If you want to may support the money is used for a specific purpose (like college), discuss your expectations with your child before they turn 18, or use a trust instead of a custodial account.