A minor can open and own a savings account, but a parent or guardian must co-sign and manage it until the child reaches the age of majority in their state

Most banks and credit unions allow children to have savings accounts starting as early as infancy. The account belongs to the child, but because minors cannot sign legal documents, a parent or guardian acts as a custodian — meaning they have signing authority and can deposit or withdraw money on the child's behalf. The child's name appears on the account, and the account is in their Social Security number, so the savings belong to them.

The age at which a child can take over the account alone varies by state and by bank. In most places, this happens at 18, but some states set it at 19 or 21. When that age arrives, the custodian's authority ends automatically, and the account becomes the young person's sole responsibility. Until then, the parent or guardian controls access while the child learns how savings work.

Key Takeaways

  • A parent or guardian must open the account and sign as custodian, but the account is legally the child's and uses the child's Social Security number.
  • The custodian can deposit money, withdraw money, and manage the account until the child reaches the age of majority — usually 18, but sometimes 19 or 21 depending on your state and bank.
  • Most banks and credit unions offer youth or teen savings accounts with the same FDIC protection as adult accounts, meaning deposits up to $250,000 are insured against bank failure.
  • When the child reaches the age set by the bank, the custodian's authority ends and the account becomes the young person's to manage alone.

What you need to open a minor's savings account

To open an account, bring the child and the parent or guardian who will be custodian to a bank or credit union branch. You will need the child's Social Security number, proof of the child's identity (usually a birth certificate), and proof of the custodian's identity (a driver's license or passport). Some banks accept applications online if you have a camera to photograph documents, but many still require an in-person visit.

The bank will ask which parent or guardian should be custodian. If both parents want authority, some banks allow both to sign; others allow only one. Ask the bank directly what your options are. The custodian is the person who can withdraw money and make decisions about the account, so choose someone the child trusts and who will be available long-term.

You do not need to deposit money on the day you open the account. Many families open the account and then add money over time — through allowance, gifts, or earnings from chores or work.

How much money can a minor keep in a savings account

There is no legal limit on how much a child can save. The bank's limit depends on the account type and the bank's own rules. Most youth savings accounts have no maximum balance, though some banks cap deposits at a certain amount per month or per year. Check with your bank about their specific rules.

The money in the account is protected by FDIC insurance if the bank is FDIC-insured, which most are. This means if the bank fails, the federal government guarantees your deposits up to $250,000. A minor's account and a parent's account are insured separately, so if a parent has $200,000 in their own account and the child has $100,000 in a custodial account at the same bank, both are fully covered.

Interest and taxes on a minor's savings

Most youth savings accounts earn interest, though the rate varies widely. Some accounts earn very little — less than 0.01 percent per year — while others offer higher rates, especially if the account is a high-yield savings account. The interest is added to the account automatically, usually monthly or quarterly.

If the account earns more than a certain amount of interest in a year, the bank will send a tax form called a 1099-INT to the child's Social Security number. The custodian will need to report this on the child's tax return. The threshold changes each year, but in recent years it has been around $10 of interest. If the child has no other income, they may not owe taxes on the interest, but the income still needs to be reported. A tax professional or the IRS website can tell you whether the child owes taxes in your specific situation.

What happens when the child turns 18 or reaches the age of majority

When the child reaches the age set by your bank — usually 18 — the custodian's authority ends automatically. The account becomes the young person's sole responsibility. They can now withdraw money, close the account, or change the account type without the custodian's permission. The bank will send a notice before this happens, usually a few weeks in advance.

Some banks require the young person to visit in person to confirm they want to keep the account open. Others convert the account automatically. Either way, the transition is straightforward. The young person should understand how to use the account before this date arrives, so the handoff is smooth.

Custodial accounts versus UTMA and UGMA accounts

A regular custodial savings account is the simplest option for most families. The parent or guardian controls it, and the child owns the money. When the child reaches the age of majority, the account becomes theirs.

Some families use accounts called UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gifts to Minors Act) accounts instead. These are legal structures that allow adults to transfer money to minors with tax advantages. However, UTMA and UGMA accounts have a significant difference: when the child reaches the age of majority — usually 18 or 21, depending on the state — the money becomes theirs automatically, and they can withdraw it all at once. The custodian loses all control. A regular custodial savings account does not have this requirement; the young person can keep it open and the custodian can remain involved if both agree.

For most families saving for a child's near-term needs — like a school trip or a car — a regular custodial savings account is simpler. UTMA and UGMA accounts are more common for larger gifts or inheritances meant for the child's future. Ask your bank which option makes sense for your situation.

How a minor's savings account teaches financial habits

A savings account gives a child a concrete place to watch money grow. Unlike cash hidden in a drawer, money in an account earns interest, appears on statements, and teaches the child that saving has a reward. Many families use youth accounts to teach children about setting goals — saving for a bicycle, a video game, or a trip — and watching their progress toward that goal.

The custodian can also use the account to teach responsibility. Some families give the child a debit card linked to the account (if the bank offers one) so the child can practice withdrawing money and checking their balance. Others keep the debit card in the custodian's control and use the account as a teaching tool during conversations about money. There is no single right way; the goal is to help the child understand that money is something you can save, spend thoughtfully, and watch grow over time.

Frequently Asked Questions

Can a child open a savings account without a parent?

No. A minor cannot sign legal documents, so a parent or guardian must open the account and sign as custodian. The account belongs to the child, but the parent or guardian must be present and sign the paperwork.

What if the custodian and child disagree about withdrawing money?

Until the child reaches the age of majority, the custodian has legal authority over the account. The custodian can withdraw money even if the child objects. This is why choosing a trustworthy custodian matters. Once the child reaches the age of majority, the custodian has no authority and cannot access the account without the young person's permission.

Can a child have a savings account at more than one bank?

Yes. A child can have accounts at multiple banks. Each account is insured separately up to $250,000 by the FDIC, so the child's total savings are protected as long as no single account exceeds that amount. Some families use multiple accounts to organize money for different goals.

Do I need to report the account to the government?

You do not need to report the account itself. However, if the account earns interest above a certain threshold — usually around $10 per year — the bank will send a tax form and the interest must be reported on the child's tax return. The bank will tell you if this applies to your account.

What happens if the custodian dies?

The account belongs to the child, not the custodian, so it does not automatically close. However, the bank will need to know that the custodian has died. Contact the bank with a death certificate, and the bank will either appoint a new custodian (usually the other parent or a court-appointed guardian) or transfer the account to the child if they have reached the age of majority. The exact process depends on the bank and your state's laws.