You can open a savings account for a grandchild in their name, but you'll need their Social Security number and a parent or guardian's permission

The account belongs to your grandchild, not to you, even though you're the one opening it. Banks call this a custodial account — a savings account held in a minor's name with an adult (the custodian) managing it until the child reaches the age of majority, usually 18 or 21 depending on your state.

You'll need three things to open one: your grandchild's Social Security number, a parent or legal guardian's signature on the account paperwork, and proof of your own identity. Some banks also ask for the child's birth certificate. The parent or guardian doesn't have to be present in person at many banks — you can often get their signature by mail or email — but they do have to consent.

Once the account is open, you can deposit money whenever you want. Your grandchild can't withdraw funds without your permission until they reach the age set by your state's law, at which point the account becomes theirs to manage fully.

Key Takeaways

  • A custodial savings account is opened in your grandchild's name with a parent or guardian's written consent, and you manage it as the custodian.
  • You will need your grandchild's Social Security number, your own ID, and the parent or guardian's signature on the account opening form.
  • Money you deposit into a custodial account is a gift to your grandchild and becomes theirs legally, though you control it until they reach age 18 or 21.
  • Different banks have different rules about how much you can deposit, whether the account earns interest, and what fees explore, so compare a few before choosing.
  • At age 18 or 21, depending on your state, your grandchild gains full control of the account and you no longer manage it.

What documents you need to bring or provide

Start by gathering your grandchild's Social Security number. If you don't have it, ask the parent or guardian — they received it when the child was born or when they obtained a Social Security card. You'll also need your own government-issued ID, such as a driver's license or passport.

The parent or legal guardian must sign the account opening form. Many banks allow you to collect this signature by mail or email rather than requiring everyone to visit in person. Ask the bank whether they can email you the form, or whether you need to pick it up and return it. Some banks have online forms that a parent can sign electronically.

A few banks ask for the child's birth certificate as well, though most do not. Call ahead to confirm what your chosen bank requires before you visit or start the online process.

How to choose between banks and account types

Not all banks offer custodial savings accounts, and the ones that do have different rules. Some require a minimum deposit to open the account — this might be $25, $100, or more. Others charge monthly fees if the balance falls below a certain amount. A few waive fees for minors' accounts entirely.

Interest rates vary widely. Some custodial accounts earn very little interest — sometimes less than 0.01 percent per year. Others, particularly at online banks or credit unions, may offer rates closer to 4 or 5 percent, though these change frequently. If you're planning to save for many years, even a small difference in interest adds up.

Call or visit the websites of banks and credit unions in your area, and also look at online banks. Ask each one: What is the current interest rate? Is there a monthly fee? What is the minimum deposit? Can a parent sign the paperwork remotely, or do they need to visit in person? Write down the answers so you can compare.

Opening the account in person versus online

If you visit a bank branch in person, a staff member will walk you through the form and answer questions on the spot. This is often the simplest route if a bank branch is near you and the parent or guardian can visit with you, or if the bank allows them to sign remotely.

Many online banks also offer custodial accounts. You start the process on their website, upload photos of your ID and your grandchild's Social Security card or number, and then the parent or guardian signs electronically. This usually takes a few days. Online banks often have lower fees and higher interest rates than traditional banks, but you can't walk in and ask questions face-to-face.

If you choose an online bank, make sure you're comfortable using their website or app to deposit money later. Some allow you to transfer funds from another bank account. Others require you to mail in checks or use a mobile deposit feature (taking a photo of a check with your phone).

What happens to money you deposit

Any money you put into the account is legally a gift to your grandchild. You cannot take it back. This matters for two reasons: first, it's important to be clear in your own mind that this money is for them, not a loan to yourself. Second, if you have a lot of assets, large gifts can affect your taxes or your may be able to access for certain benefits — though most grandparents' gifts are small enough that this is not a concern. If you're unsure, ask a tax professional.

The money earns interest (if the account offers it) and stays in the account until your grandchild reaches the age of majority in your state. At that point, the account is theirs to manage. You no longer have authority over it, and they can withdraw all the money if they choose.

Some grandparents use custodial accounts to teach children about saving. Others use them as a way to set aside money for college or a first car. There's no rule about what the money must be used for — that's between you and your grandchild once they're old enough to decide.

If the parent or guardian won't consent

A parent or legal guardian must consent to the account. If they refuse, you cannot open a custodial account in the child's name. You do have other options: you can open a savings account in your own name and keep the money separate, or you can give money directly to the parent or guardian and ask them to hold it for the child. Neither of these gives the child the same legal ownership, but they accomplish the goal of setting money aside.

If there's a custody dispute or you're unsure who the legal guardian is, contact your local family court. They can tell you who has legal authority to consent to financial accounts on the child's behalf.

Managing the account after it opens

Once the account is open, you can deposit money by transferring it from another bank account, mailing a check, or (at some banks) depositing cash at a branch. Keep track of the account number and the bank's contact information so you can check the balance and make deposits.

Some custodial accounts allow the child to have a debit card once they reach a certain age — often 13 or older — so they can practice using money responsibly. Ask the bank whether this is an option and at what age it becomes available.

You remain the custodian and have authority over the account until your grandchild reaches the age of majority. At that point, the account automatically transfers to their control. The bank will notify you when this happens. After that, you can no longer make withdrawals or changes without their permission.

Frequently Asked Questions

Can I open a custodial account if I'm not the grandchild's legal guardian?

Yes. Any adult can open a custodial account as long as a parent or legal guardian consents. You don't have to be the primary caregiver or have custody. The parent or guardian just needs to sign the account paperwork.

What if I want to take money out before my grandchild turns 18?

You can withdraw money from a custodial account you manage, but the money still belongs to your grandchild legally. Some people withdraw funds to pay for the child's expenses — school supplies, sports fees, medical costs — which is allowed. Taking money for your own use is not recommended and can create legal and family problems.

Does opening a custodial account affect my grandchild's taxes?

If the account earns interest or investment income, your grandchild may owe taxes on that income. The amount depends on how much interest is earned and your state's tax laws. The bank will send a tax form (1099-INT) if interest exceeds a certain threshold. Ask the bank or a tax professional about your specific situation.

Can I name someone else to take over the account if something happens to me?

Some banks allow you to name a successor custodian when you open the account. This person would take over managing the account if you die or become unable to manage it. Ask the bank whether this option is available and whether it costs anything to set up.

What's the difference between a custodial account and a 529 college savings plan?

A custodial savings account is a regular bank account in your grandchild's name. A 529 plan is a tax-advantaged investment account specifically for college expenses. With a 529, you may get tax breaks, but the money is restricted to education costs. A custodial account is more flexible — the money can be used for anything once your grandchild is old enough to control it.