What you need to open an account for a child
A parent or legal guardian must open the account in person at a bank or credit union. The child does not have to be present, though many institutions allow it. You will need your own government-issued photo ID, the child's Social Security number, and proof of your address — a recent utility bill, lease, or mortgage statement usually works.
Some banks also ask for the child's birth certificate, though not all require it. Call ahead to confirm what the institution needs; requirements vary between banks and between branches of the same bank. A few online banks allow account opening by mail or video, but most require an in-person visit.
The account will be registered as a custodial account — the parent or guardian holds legal control until the child reaches the age of majority, which is 18 in most states and 21 in a few. The child's name and Social Security number appear on the account, so the bank reports interest earned to the IRS under the child's tax ID.
Key Takeaways
- You must visit a bank or credit union in person with your ID and the child's Social Security number; the child does not have to attend.
- The account is custodial, meaning you control it until the child reaches 18 or 21 depending on your state, but interest is reported under the child's Social Security number.
- Most banks offer no monthly fees on children's savings accounts, though some require a minimum opening deposit of $25 to $100.
- Interest rates on children's savings accounts are typically very low — often 0.01% to 0.05% annually — so the account functions mainly as a safe place to hold money, not as a growth tool.
- When the child turns 18 or 21, the account automatically converts to an adult account under their sole control, though some banks require a visit to complete the transition.
Choosing between a savings account and a checking account
A savings account is designed to hold money and earn a small amount of interest. Withdrawals are limited — federal rules once capped them at six per month, though that rule has been relaxed. Most children's savings accounts have no monthly fees and no minimum balance requirement, though some banks ask for $25 to $100 to open.
A checking account comes with a debit card and allows unlimited withdrawals and deposits. It typically earns no interest. Many banks offer checking accounts for minors with parental controls — you can set daily spending limits, block certain types of transactions, or require your approval before large purchases.
Many families open both: a savings account where the child deposits money they want to keep, and a checking account with a debit card for everyday spending. The savings account teaches the difference between money to spend now and money to save. If the child is very young — under 13 — a savings account alone is usually enough. If they are a teenager with part-time income or regular allowance, a checking account with a debit card becomes more practical.
How interest works on a child's savings account
Banks pay interest on savings account balances, but the rate is very low. Most children's savings accounts earn between 0.01% and 0.05% annually. A $1,000 balance earning 0.05% per year generates 50 cents in interest. The rate varies by bank and changes over time as the Federal Reserve adjusts its benchmark rates.
Interest is calculated daily but paid monthly or quarterly, depending on the bank. The child receives a statement showing the interest earned, and the bank reports the total annual interest to the IRS. If the child earned more than $1,300 in interest during the year — which is extremely unlikely on a children's account — the child would owe federal income tax on it.
The low interest rate means the account's purpose is safety and habit-building, not growth. If you want the money to grow faster, a 529 education savings plan or a Coverdell Education Savings Account offers tax advantages, though those are restricted to education expenses. For general savings, the bank account is the right tool.
What happens when the child turns 18 or 21
The account automatically converts to an adult account on the child's birthday, depending on your state's age of majority. In most states this is 18; in Alabama, Nebraska, and Wyoming it is 19; in Mississippi it is 21. You no longer have legal control, and the child can withdraw money, close the account, or change account settings without your permission.
Some banks require a visit to the branch to complete the transition. Others handle it automatically and send the child a new debit card and updated account documents. Check with your bank a few months before the child's birthday to understand what happens on that date and whether you need to take any action.
If you want to maintain oversight after the child turns 18, you can add yourself as an authorized user on the account, though the child can remove you. Some families use this transition as a conversation point — the child now owns the account fully, and you can discuss how they plan to manage it going forward.
Comparing banks and credit unions
Banks and credit unions both offer children's savings accounts, and the choice often comes down to which institution you already use. Banks are for-profit and have more branches and ATMs in most areas. Credit unions are member-owned nonprofits and often offer lower fees and slightly higher interest rates, though they have fewer locations.
Online banks like Marcus, Ally, and Discover offer children's savings accounts with no monthly fees and slightly higher interest rates — sometimes 0.05% to 0.10% — but you cannot visit a branch in person. If you need to open the account in person, you will need a local bank or credit union. If you are comfortable managing the account online, an online bank may offer better rates.
| Account Type | Monthly Fee | Minimum to Open | Typical Interest Rate | Access |
|---|---|---|---|---|
| Traditional bank savings | $0 to $5 | $0 to $100 | 0.01% to 0.05% | In-person and online |
| Credit union savings | $0 to $3 | $0 to $50 | 0.02% to 0.08% | In-person and online |
| Online bank savings | $0 | $0 to $25 | 0.05% to 0.10% | Online only |
Setting up parental controls and monitoring
If you open a checking account with a debit card, most banks let you set limits on how much the child can spend per day or per transaction. You can also block certain types of purchases — for example, preventing online transactions or ATM withdrawals — and require your approval for transactions over a set amount.
Parental controls are usually managed through the bank's mobile app or online portal. You log in with your own credentials and adjust the child's account settings. Some banks send you a notification each time the child uses the debit card; others let you check the balance and transaction history whenever you log in.
For a savings account without a debit card, parental controls are less relevant. You can monitor the balance and deposits online, but the child cannot spend the money without your involvement. This is often the point — the savings account is meant to be harder to access than a checking account.
Tax reporting and the child's Social Security number
The bank reports interest earned on the account to the IRS using the child's Social Security number. If the child earned more than $1,300 in interest during the year, the child must file a federal tax return. On a typical children's savings account, this is not a concern — the interest earned is usually a few dollars or less.
When you file your own taxes, you do not claim the child's interest income. The child is responsible for reporting it, though in practice the IRS rarely pursues tax on interest under $1,300. If the child has other income — from a job, for example — the interest is added to that total income when determining whether a tax return is required.
You will need the child's Social Security number to open the account. If the child does not have one, you can request one from the Social Security Administration before opening the account. The process takes about two weeks by mail or can be done in person at a local Social Security office.
Frequently Asked Questions
Can I open a savings account for a child without them being present?
Yes. You can open the account in person with your ID and the child's Social Security number. The child does not have to attend. Some banks allow you to open the account by mail or video call, though most require an in-person visit.
What is the difference between a custodial account and a regular account?
A custodial account is controlled by the parent or guardian until the child reaches 18 or 21. The child's name and Social Security number are on the account, but you make all decisions about deposits, withdrawals, and account settings. When the child reaches the age of majority, the account becomes theirs to control fully.
Will the interest my child earns on a savings account affect their financial aid for college?
Interest earned on a custodial account is reported under the child's Social Security number, so it may be counted as the child's asset when determining financial aid. The impact is usually small — a few dollars in interest per year — but it is worth discussing with a financial aid office if the child is approaching college age with significant savings.
Can I add money to my child's account whenever I want?
Yes. There are no limits on deposits to a custodial savings account. You can add money whenever you choose. Some banks set limits on withdrawals, but deposits are unlimited.
What happens if I close the account before the child turns 18?
You can close the account at any time. The bank will issue a check or transfer the balance to another account. The child cannot prevent you from closing it while they are a minor, since you have legal control. Once they turn 18 or 21, they can close the account themselves.