Yes, you can open a savings account for your child at most banks and credit unions

You can open a savings account in your child's name at nearly every bank and credit union in the country. The account belongs to your child, but you control it as the parent or legal guardian until they reach the age of majority — usually 18, sometimes 21 depending on your state and the institution.

The mechanics are straightforward: you bring your child (or sometimes just their birth certificate), your ID, and proof of address. The bank creates an account with your child's Social Security number. You become the custodian, which means you can deposit money, withdraw it, and manage the account on their behalf. Your child can see the balance and, depending on the bank's rules, may be able to make deposits or withdrawals once they're old enough to visit the branch or use online banking.

What varies is the minimum balance required, the interest rate paid, and the age at which your child can take control. Some banks have no minimum; others require $25 or $100. Some pay nearly nothing; others offer rates competitive with adult accounts. Some let your child take over at 16; others wait until 18 or 21.

Key Takeaways

  • You can open a custodial savings account at any bank or credit union using your child's Social Security number and your ID.
  • The account is in your child's name but under your control until they reach the age of majority, which varies by state and institution.
  • Minimum balances, interest rates, and the age of account transfer differ by bank, so comparing a few options takes 15 minutes and can mean hundreds of dollars over time.
  • Money in a custodial account counts as your child's asset on financial aid forms, which can reduce the aid they receive in college.
  • Once your child reaches the age set by the bank, the account becomes theirs to control, and you lose access unless they add you as an authorized user.

What you need to bring to open the account

Bring your government-issued ID (driver's license or passport), proof of your current address (a utility bill or bank statement dated within the last 60 days), and your child's Social Security number. Some banks also ask to see your child's birth certificate, though many will open the account without the child present.

If you're opening the account online, you'll upload photos of your ID and address proof, then enter your child's Social Security number. The bank verifies your identity through a third-party service — usually by asking you questions about your credit history or past addresses. The whole process takes 10 to 20 minutes.

If your child does not yet have a Social Security number, you can obtain one through the Social Security Administration. The process takes about two weeks by mail or can be done in person at a local Social Security office. Some hospitals issue Social Security numbers at birth, so check your child's documents first.

How the account works while you're the custodian

Once the account is open, you can deposit money by transferring it from your own account, making a mobile deposit by photographing a check, or depositing cash at a branch. You can withdraw money the same way — through your online banking, at an ATM, or at a teller window. Most banks let you set up automatic transfers, so you can move money into your child's account on a schedule (for example, $25 every two weeks as an allowance or savings goal).

Your child cannot access the account until the bank's rules allow it. Some banks let children as young as 13 open their own online banking login and see the balance. Others require the child to be 16 or 18 before they can withdraw money. Check the bank's policy before you open the account if your child's access matters to you.

The account earns interest, though the rate varies widely. As of early 2024, most banks pay between 0.01% and 0.05% on regular savings accounts, while some online banks and credit unions pay 4% to 5% on savings accounts for minors. Over five years, the difference between 0.01% and 4.5% on $5,000 is roughly $1,100. It's worth comparing rates across three or four banks before you decide.

When your child takes control of the account

At the age set by your bank — usually 18, sometimes 16 or 21 — the account automatically transfers to your child's sole control. You lose access. Your child can then withdraw all the money, close the account, or keep it open and continue saving. They cannot undo this transfer; once they're in control, you cannot regain access unless they add you as an authorized user.

This matters if you're saving money for a specific purpose (college tuition, a car, a down payment on a house) and you're worried your child might spend it differently. Some parents use a custodial account anyway, betting that by the time their child reaches 18, they'll understand the purpose and respect the savings. Others use a trust or a 529 college savings plan instead, which gives them more control over when and how the money is used.

Before the account transfers, ask your bank what happens. Some banks send a notice; others do not. Some require your child to visit a branch or confirm their identity online; others transfer automatically. Know the process so you're not surprised.

How a custodial account affects financial aid

Money in a custodial savings account counts as your child's asset when they explore for federal student aid. The Free process for Federal Student Aid (FAFSA) asks about assets in the student's name, and custodial accounts are included. The formula assumes your child will contribute a percentage of their assets toward college costs — roughly 20% per year — which reduces the aid they receive.

For example, if your child has $10,000 in a custodial savings account when they explore for college, the aid formula may count $2,000 of that as available for college costs. If the college's cost is $25,000 and you have no other assets, your child might receive $2,000 less in grants or subsidized loans than they would have without the account.

This is one reason some parents use a 529 college savings plan instead of a custodial account. Money in a 529 plan counts as a parent asset on the FAFSA, not a student asset, so it reduces aid by a smaller percentage. However, 529 plans have rules about how the money can be used, and withdrawals for non-education purposes trigger taxes and penalties.

Custodial accounts versus other ways to save for your child

A custodial savings account is straightforward and flexible — you can withdraw the money for any reason, and your child can take control when they're old enough. But it's not the only option.

A 529 college savings plan lets you save money specifically for education with tax advantages. Contributions grow tax-free, and withdrawals for college tuition, room and board, books, and some other education expenses are not taxed. If you withdraw money for something else, you pay taxes on the earnings plus a 10% penalty. A 529 counts as a parent asset on the FAFSA, reducing aid less than a custodial account would.

A trust gives you more control over when your child can access the money. You can specify that the money be used only for college, or that your child can't touch it until they're 25, or that it goes to a grandchild if your child dies. Trusts cost more to set up (usually $500 to $2,000 with a lawyer) and are more complex to manage, but they're useful if you want to protect a large sum or have specific conditions in mind.

A Uniform Transfers to Minors Act (UTMA) account is similar to a custodial savings account but can hold investments like stocks and mutual funds, not just cash. The rules and age of transfer vary by state. UTMA accounts are less common than custodial accounts because they're more complex and most parents don't need to invest on behalf of a minor.

What happens if you need the money before your child reaches adulthood

You can withdraw money from a custodial account at any time — there's no legal barrier. However, the money belongs to your child, and withdrawing it for your own use is technically a breach of your duty as custodian. In practice, most parents withdraw from custodial accounts when they need to, and there's no enforcement unless your child or another party sues you.

If you're concerned you might need the money, a custodial account may not be the right choice. A regular savings account in your own name gives you full control and no legal complications. You can always give money to your child later if you want to.

Some banks also let you set restrictions on the account — for example, requiring both your signature and your child's to withdraw large amounts, or freezing the account until a certain date. Ask your bank what options are available.

Frequently Asked Questions

Can I open a custodial account if I'm not the child's parent?

Yes. Grandparents, aunts, uncles, and legal guardians can all open custodial accounts. You need to be the legal guardian or have a power of attorney from the parent. Some banks ask for documentation; others don't. Call the bank before you visit to confirm what they require.

Does my child need to be present when I open the account?

No. Most banks let you open a custodial account with just your ID and your child's Social Security number. Your child does not need to visit the branch or sign anything. Some banks do ask to see the child in person, so call ahead if you want to avoid a second trip.

What if my child's other parent wants to control the account too?

You can add the other parent as a joint custodian when you open the account, or ask the bank to add them later. Both of you will have full access and can withdraw money without the other's permission. If you're concerned about control, discuss it with the other parent before opening the account, or use a trust instead.

Can I move the account to a different bank later?

Yes. You can close the custodial account at one bank and open a new one at another bank, then transfer the balance. The process is the same as moving a regular savings account — the new bank handles most of the paperwork. It usually takes three to five business days.

What happens to the account if I die before my child reaches adulthood?

The account becomes part of your estate. If you have a will, you can name a guardian or trustee to manage the account on your child's behalf. If you don't have a will, the court appoints someone, which can be slow and expensive. Name a custodian in your will or use a trust to avoid this problem.