What you need to open a child's savings account

You can open a savings account for a child at most banks and credit unions, but the process depends on the child's age. For children under 18, a parent or legal guardian must open the account and be listed as a co-owner or custodian. The bank will ask for your identification, the child's Social Security number, and proof of address — usually a recent utility bill or lease in your name.

Some banks let you open an account online; others require you to visit a branch in person. A few institutions have a minimum age requirement (often 13 or older for certain account types), while others have no age floor. Call ahead or check the bank's website to confirm what documents they need and whether they'll let you bring an infant or toddler, since some branches have rules about who can be present during account opening.

You do not need the child to be present at account opening, though some parents choose to bring them to make it feel real. The account will be in both your name and the child's name, so you can deposit money, withdraw it, and manage it until the child reaches the age of majority in your state — typically 18 or 21.

Key Takeaways

  • A parent or legal guardian must open the account and be listed as co-owner; the child's Social Security number is required.
  • You will need your own ID, proof of address, and the child's Social Security number or tax ID.
  • Most banks and credit unions offer children's savings accounts with low or no minimum balance requirements.
  • Interest rates on children's accounts vary widely, so comparing rates across institutions can add up over time.
  • Once the child turns 18, you can convert the account to a standard account in their name alone, or they can open their own account and move the money.

Where to open the account: banks versus credit unions

National banks like Chase, Bank of America, and Wells Fargo all offer children's savings accounts, as do most regional and local banks. Credit unions often have lower fees and higher interest rates on savings, though you must be a member to open an account — membership usually requires living or working in a specific area or belonging to a particular group.

Credit unions are worth checking first if you are already a member or if your employer or school has a partnership with one. Their children's accounts often have no monthly maintenance fees and no minimum balance. National banks typically charge a small monthly fee ($5 to $10) unless you maintain a minimum balance, though some waive the fee for accounts under a certain balance or linked to a parent's account.

Online banks like Ally, Marcus, and Discover also offer children's savings accounts, usually with no monthly fees and no minimum balance. The trade-off is that you cannot deposit cash in person — you transfer money electronically or by mail. For a young child whose savings come from birthday money or allowance, an online bank works fine. For a teenager who might want to deposit cash from a job, a bank with physical branches is more practical.

Interest rates and how they affect a child's savings

Interest rates on children's savings accounts range from nearly 0% at some large banks to 4% or higher at online banks and credit unions, depending on the current economic environment. The difference matters more than it sounds: $1,000 saved at 0.01% earns about 10 cents a year, while the same amount at 4% earns $40 a year. Over five years, that gap grows to $200 versus $50 in interest.

Rates change frequently and vary by institution, so check the current rate before opening the account. Many banks publish their rates on their website; if not, call or visit a branch. Some accounts offer a promotional rate for the first few months, then drop to a lower rate — read the fine print to see when the rate changes.

For a child's first account, the interest rate matters less than the lack of fees and the ease of depositing money. But if you are planning to save a significant amount over several years, comparing rates across three or four institutions can make a real difference.

Custodial accounts versus joint accounts

Most children's savings accounts are joint accounts, meaning both you and the child are listed as owners. You have full control, and the child's name is on the account. When the child turns 18, the account remains in both names unless you take steps to change it.

Some institutions offer custodial accounts (also called Uniform Transfers to Minors Act accounts, or UTMA accounts), which are legally owned by the child but managed by you as custodian. The money belongs to the child, not to you, and when they turn 18 or 21 (depending on your state), the account transfers to them automatically. Custodial accounts have tax implications — earnings above a certain amount are taxed at the child's rate rather than yours — so ask the bank whether a custodial account makes sense for your situation.

For most families, a straightforward joint savings account is the right choice. It is easier to set up, requires no special paperwork, and gives you the flexibility to manage the account however you see fit.

What happens when the child turns 18

When your child reaches 18, the account does not automatically close or transfer. If it is a joint account, both of you remain owners and can access the money. Many parents and teenagers leave the account as-is, especially if the teen is still living at home or in school.

If you want to remove yourself from the account, you can visit the bank and ask to convert it to an account in the child's name alone. Some banks do this automatically; others require both of you to sign paperwork. If the child wants to move the money to their own account elsewhere, they can withdraw it and deposit it into a new account in their name.

The key point: there is no important date or automatic action. You and your child can decide together what makes sense based on their situation and your preferences.

Deposits, withdrawals, and managing the account

As the parent or guardian, you can deposit money into the account at any time — through an ATM, at a branch, by mail, or online, depending on the bank. You can also withdraw money whenever you need to, though some accounts limit the number of withdrawals per month (usually six, a federal rule that applies to most savings accounts).

Once the child is old enough, you can give them a debit card linked to the account so they can make withdrawals and check the balance themselves. Most banks issue debit cards starting around age 13, though some offer them earlier. A debit card teaches a child how to use money responsibly and gives them a sense of ownership over their savings.

You can also set up automatic transfers from your checking account to the child's savings account each month — a straightforward way to build the habit of saving without having to remember to deposit money manually.

Tax considerations and reporting

Interest earned in a child's savings account is taxable income. If the interest is $10 or less per year, you do not need to report it. If it is more than $10, you must report it on your tax return — usually on Schedule B (Interest and Ordinary Dividends) or on the child's own return if they file one.

The bank will send you a Form 1099-INT each January showing how much interest was earned in the previous year. Keep this form with your tax documents. For most children's accounts earning minimal interest, this is a small detail, but it is worth knowing about so you are not surprised when the form arrives.

Frequently Asked Questions

Can I open a savings account for a newborn or infant?

Yes. You will need the child's Social Security number, which you can obtain from the Social Security Administration or request when you explore for a birth certificate. Some banks allow you to open the account online; others require an in-person visit. There is no age minimum at most institutions.

What if the child does not have a Social Security number yet?

You can obtain one from the Social Security Administration office or by mail. The process takes a few weeks. Some banks will let you open the account and add the Social Security number later, but confirm this before you visit or start an online process.

Can a grandparent or other relative open a savings account for a child?

Most banks require a parent or legal guardian to open the account. If you are the legal guardian but not the biological parent, bring documentation of guardianship. If you are a grandparent without legal guardianship, ask the bank whether they will let you open a custodial account or whether the parent must be present.

Is a savings account better than a 529 college savings plan?

They serve different purposes. A savings account is flexible — you can withdraw money for any reason without penalty. A 529 plan offers tax advantages for education expenses but charges a penalty if you withdraw money for non-education purposes. For general savings and teaching a child about money, a savings account is simpler. For long-term college savings, a 529 plan may offer better tax treatment.

What if I want to close the account later?

You can close a child's savings account at any time by visiting the bank or calling. The bank will issue a check or transfer the remaining balance to another account. There is usually no fee to close, though confirm this before you start the process.