Yes, you can open a savings account for your child, and it's one of the simplest ways to start teaching them about money

You can open a savings account in your child's name at most banks and credit unions, even if they're very young. The account belongs to your child, but you control it as their parent or legal guardian until they reach the age of majority (usually 18). You'll need your child's Social Security number, proof of your identity, and proof of your address — the same documents you'd use to open your own account.

The main decision is whether to open a custodial account (in your child's name with you as custodian) or a joint account (in both your names). A custodial account teaches your child that the money is theirs; a joint account is simpler to manage but blurs ownership. Most parents choose custodial because it's clearer for the child and cleaner if you later want to transfer control.

Interest rates on children's savings accounts are usually the same as adult accounts at the same bank, though some institutions offer slightly higher rates to encourage families to save. The account itself costs nothing to open, and most have no monthly fees if you keep a small balance.

Key Takeaways

  • You can open a custodial savings account for your child at any age, using your Social Security number and theirs, plus proof of identity and address.
  • Custodial accounts belong to your child but you control them until they turn 18, making them clearer for teaching money habits than joint accounts.
  • Most children's savings accounts charge no monthly fee and pay the same interest rate as adult accounts at the same bank.
  • Deposits to a custodial account are considered gifts and do not affect your taxes, though the account's interest income may affect your child's tax filing once it exceeds a small threshold.

What documents you need to bring

Bring your own government-issued ID (driver's license or passport), proof of your current address (a utility bill or lease dated within the last 60 days), and your child's Social Security number. Some banks also ask for your child's birth certificate, though most do not require it if you have the Social Security number.

If you're opening the account online, you'll upload images of these documents instead of bringing them in person. The process usually takes a few minutes, and the account opens the same day or within one business day. If you're opening in a branch, bring the originals; the bank will copy them.

Custodial versus joint accounts

A custodial account is registered as "Your Child's Name, under the Uniform Transfers to Minors Act" or similar language. The money is legally your child's, but you have the power to manage it. When your child turns 18 (or 21 in some states), the account automatically transfers to their control, and you can no longer withdraw from it without their permission.

A joint account lists both your name and your child's name as owners. Either of you can withdraw money at any time. Joint accounts are easier to manage day-to-day but create confusion about who owns the money, and they may complicate things if you have other children or if your child later disputes withdrawals.

Most parents choose custodial because it's clearer teaching tool: your child can see that the account is theirs, and the automatic transfer at 18 marks a real transition. If you want to keep control after your child turns 18, a custodial account won't let you — you'd need to have a conversation about it instead, which is usually healthier.

How interest and taxes work on children's accounts

The interest your child's account earns is taxable income to your child, not to you. If the interest is less than about $1,300 per year (the threshold varies slightly year to year), your child owes no federal tax on it and you don't need to file a return for them. If it's more than that, you'll file a tax return for your child reporting the interest income.

Money you deposit into the account is a gift and does not count against your annual gift tax limit. You can deposit as much as you want without tax consequences to yourself. The account's interest earnings are what trigger the tax filing requirement, not the deposits.

If you're saving a large amount for your child's future, ask the bank whether they offer a high-yield savings account for minors. Interest rates change frequently, but some online banks currently pay significantly more than traditional banks — the difference compounds over years.

When your child can take control

At age 18 (or 21 in a few states), your child becomes the sole owner of the account. You can no longer withdraw money, deposit money, or see the balance without their permission. Some banks send a notice when this happens; others don't. Mark the date on your calendar so you're not surprised.

Before that happens, talk to your child about the account. Show them the balance, explain how interest works, and discuss what the money is for. If you want them to use it for college or a car, say so explicitly — the account transfer doesn't come with instructions.

If your child is responsible with money, the automatic transfer is clean and teaches them that the account is theirs. If you're worried they'll spend it unwisely, you have options: you can close the account and move the money to a 529 college savings plan (which has different rules), or you can have a conversation about expectations before they turn 18.

Where to open the account

You can open a children's savings account at any bank or credit union. National banks like Chase, Bank of America, and Wells Fargo offer them; so do smaller regional banks and online banks. Credit unions often have lower fees and sometimes higher interest rates, and membership is usually open to anyone in your area.

Compare three things: the interest rate (especially if you're saving a large amount), the monthly fee (most are free, but some charge if you fall below a minimum balance), and whether you can manage it online or need to visit a branch. If you already bank somewhere, opening a second account there is usually fastest because they already have your information.

Online banks typically offer higher interest rates than brick-and-branch banks, but you can't deposit cash in person — you'll need to transfer money from your own account or mail a check. If your child is old enough to understand, some online banks let them log in and see their balance, which is a good teaching tool.

How to use the account as a teaching tool

A children's savings account works best when your child knows it exists and understands what it's for. Show them the account statement, explain that interest means the bank pays them for letting the bank use their money, and let them watch the balance grow. Even small amounts — a few dollars a month from chores or birthday gifts — make the concept real.

Some parents set a rule that their child can withdraw money only for a specific goal: a bike, a trip, a musical instrument. Others let their child withdraw freely but encourage saving by matching deposits or offering a higher "interest rate" than the bank pays. The goal is to build the habit of putting money aside instead of spending it immediately.

As your child gets older, you can introduce more complex ideas: comparing interest rates at different banks, calculating how long it takes money to double, or discussing why some accounts pay more than others. By the time they turn 18 and take control, they'll understand that the account is a tool for their own goals, not just a place you put their money.

Frequently Asked Questions

Can I open a savings account for a newborn?

Yes. You'll need the baby's Social Security number, which you can get from the Social Security Administration or request when you file the birth certificate. Once you have the number, opening the account is the same as for any other child.

What happens to the account when my child turns 18?

The account automatically transfers to your child's sole control. You can no longer withdraw money or make deposits without their permission. Some banks notify you; others don't, so mark the date on your calendar. Talk to your child before it happens so they understand what's about to change.

Can I use a children's savings account to save for college?

You can, but a 529 college savings plan may be better because it offers tax advantages that a regular savings account doesn't. Money in a 529 grows tax-free if used for college expenses. A regular savings account is simpler and more flexible if you're not sure college is the goal.

Do I have to report the account to the IRS?

No. You only report the account's interest income on your child's tax return if the interest exceeds about $1,300 per year. Deposits are gifts and don't require any tax reporting.

Can I open an account if my child doesn't have a Social Security number yet?

Most banks require a Social Security number to open an account. You can get one from the Social Security Administration or request it when you file your child's birth certificate. The process takes a few weeks, so plan ahead if you want to open an account soon after birth.