You can open a bank account for a minor, but the account belongs to them, not you

Yes, you can open a bank account for your younger sibling. Most banks offer custodial accounts (also called minor accounts) that let a parent or legal guardian manage the money while the account is in the minor's name. If you are the parent or legal guardian, you can open one at nearly any bank. If you are an older sibling but not the legal guardian, you cannot open an account in their name — but you may be able to add yourself as an authorized user on an account their parent or guardian opens.

The key difference: a custodial account is legally your sibling's money. You manage it, but you do not own it. When they turn 18 or 21 (depending on your state and the bank), the account becomes theirs to control completely, and you lose access. This matters because it affects what you can do with the money, what taxes explore, and what happens if you face a lawsuit or debt.

Key Takeaways

  • If you are the parent or legal guardian, you can open a custodial account at most banks using your sibling's Social Security number and your own ID.
  • If you are an older sibling without guardianship, you cannot open an account in their name, but you can ask their parent or guardian to add you as an authorized user on their account.
  • Custodial accounts transfer to your sibling's full control at age 18 or 21, depending on your state and the bank's rules.
  • Money in a custodial account is considered your sibling's asset for tax and financial aid purposes, which can affect their college aid may be able to access.
  • You will need your sibling's Social Security number, proof of their age, and your own ID to open the account.

What you need to open a custodial account

If you are the legal guardian, bring your sibling's Social Security number, a birth certificate or passport to prove their age, and your own government-issued ID. Some banks also ask for proof of address (a utility bill or lease in your name). A few banks require an in-person visit; most now let you start online and finish in a branch, or complete the whole process online if you have a state ID or passport they can verify digitally.

The bank will ask you to choose between a Uniform Transfers to Minors Act (UTMA) account and a Uniform Gifts to Minors Act (UGMA) account. UTMA is newer and more flexible — it covers money, real estate, and other property. UGMA covers gifts only. Most banks default to UTMA. Both are custodial accounts; the difference rarely matters for a basic savings or checking account.

You will also choose who the successor custodian is — the person who takes over if you die or become unable to manage the account. This is important. If you do not name one, the bank may freeze the account or require a court order to transfer it.

If you are not the legal guardian

You cannot open an account in your sibling's name unless you have legal guardianship. A bank will not let you do it, and if you tried to forge documents or use their Social Security number without permission, you would be committing identity theft and fraud.

What you can do instead: ask your parent or guardian to open a custodial account, then request to be added as an authorized user. An authorized user can deposit money, withdraw it, and check the balance, but the account still belongs to your sibling and the parent or guardian retains full control. You can be removed at any time. This is a practical way to help manage their money without legal ownership.

If your sibling is old enough (usually 13 or older, depending on the bank), they can also be added as an authorized user on your own account, though this is less common for younger children.

Tax and financial aid consequences

Money in a custodial account is your sibling's asset, not yours. This means it counts toward their income for tax purposes and toward their assets if they later file for financial aid for college. A custodial account can reduce their financial aid may be able to access more than the same amount of money in a parent's account would.

If the account earns interest or dividends, your sibling may owe taxes on that income. The first $1,250 of unearned income (interest, dividends) is usually tax-free for a dependent minor in 2024, but amounts above that are taxed. You will receive a 1099 form from the bank if the account earns more than $10 in interest, and you will need to report it on their tax return. These rules change yearly, so check the IRS website or ask a tax professional for the current year's limits.

What happens when your sibling turns 18 or 21

The account converts to their name and control on the age of majority in your state — usually 18, but some states use 21 for UTMA accounts. You lose all access at that point. You cannot withdraw money, see the balance, or make decisions about the account. If you need to transfer remaining funds or close the account, your sibling has to do it or give you written permission.

Some banks send a notice before the conversion happens. Others do not. If you want to know the exact date, call the bank or check your account online a few months before your sibling's 18th birthday. If you have concerns about how they will manage the money, you can talk to them about it beforehand, but you cannot legally control what they do with it once they turn 18.

Choosing a bank and account type

Most major banks (Chase, Bank of America, Wells Fargo, Citibank) and credit unions offer custodial accounts. Online banks like Ally and Marcus also offer them, though some require an in-person visit to verify your sibling's identity. Compare fees — some banks charge monthly maintenance fees for minor accounts, while others waive them. A few offer higher interest rates on savings accounts for minors, though the difference is usually small.

Decide whether you want a checking account, a savings account, or both. A checking account with a debit card lets your sibling make purchases and withdraw cash. A savings account is better if the goal is to build money over time without spending it. Some banks offer accounts designed for teens that include spending limits, parental controls, and financial education tools.

If your sibling is already a teenager

If your sibling is 13 or older, some banks let them open their own account with a parent or guardian as a co-signer or authorized user. This gives them more control and teaches them to manage money themselves. The parent or guardian still has access and can set limits, but the account is in the teen's name from the start. This is different from a custodial account, where the parent or guardian is the legal owner.

A teen account is worth considering if your sibling is old enough to understand banking and you want them to learn responsibility. If they are younger or you need to manage the money closely, a custodial account is simpler.

Frequently Asked Questions

Can I open a custodial account if I am the older sibling but not the legal guardian?

No. Only a parent, legal guardian, or court-appointed custodian can open a custodial account in a minor's name. If you want to help, ask the legal guardian to open the account and add you as an authorized user. You will be able to deposit and withdraw money, but the account will still belong to your sibling.

What happens to the money if I die before my sibling turns 18?

The successor custodian you named takes over the account and manages it until your sibling reaches the age of majority. If you did not name a successor, the bank may freeze the account and require a court order to transfer it. Always name a successor custodian when you open the account.

Can my sibling access the money before they turn 18?

Only with your permission. You control the account until they reach the age of majority. You can withdraw money for their benefit (education, medical care, living expenses), but the money is legally theirs, not yours. Some banks let minors make withdrawals with a parent's permission; others require the parent to do it.

Does a custodial account affect my sibling's credit score?

No. A savings or checking account does not appear on a credit report. If the account includes a debit card, using it responsibly does not build credit either. Credit scores are based on borrowed money (loans, credit cards) and payment history. A custodial account is a good way to teach money management, but it will not help or hurt their credit.

Can I use the money in the custodial account to pay for my own expenses?

Legally, no. The money belongs to your sibling. Using it for your own expenses is a breach of your duty as custodian and could be considered theft or embezzlement. You can use the money only for your sibling's benefit — education, medical care, living expenses, and similar costs. If you misuse the account, your sibling or their guardian can sue you to recover the money.