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, and the process takes about 15 to 30 minutes. You will need your own government-issued ID, the child's Social Security number, and an initial deposit (usually $25 to $100, though some institutions have no minimum). If the child is under 18, you will be the account owner or co-owner — the child cannot legally hold the account alone.

The main choice is whether to open a custodial account (where you control it until the child reaches the age of majority, typically 18 or 21) or a joint account (where both you and the child have access). Custodial accounts are more common for younger children because they prevent the child from withdrawing all the money without permission. Joint accounts work better for teenagers who are learning to manage money and need to see their own balance and activity.

You can open the account in person at a branch, online, or by phone. Online and phone openings are faster and often have lower minimums, but you will need to verify the child's identity — usually by uploading a photo of their Social Security card or birth certificate. In-person openings let you ask questions and hand over documents directly.

Key Takeaways

  • You need your ID, the child's Social Security number, and a small opening deposit to start a savings account for a child.
  • Custodial accounts let you control the money until the child reaches 18 or 21; joint accounts give the child access to their own balance and transactions.
  • Banks and credit unions both offer children's accounts, and online banks often have higher interest rates and lower minimums than branches.
  • The account will be linked to your Social Security number and tax ID, so interest earned is reported on your tax return until the child is old enough to file their own.

Custodial accounts versus joint accounts

A custodial account is registered in the child's name but under your control. You can deposit money, withdraw money, and manage the account without the child's permission. When the child reaches the age of majority (18 in most states, 21 in a few), the account automatically transfers to their full control — you lose access. This structure is useful if you are saving money for the child's future and want to prevent them from spending it on impulse.

A joint account lists both you and the child as owners. Both of you can deposit and withdraw money without asking permission. The child can see the balance online or on a statement, which teaches them how deposits and withdrawals work. Joint accounts are better for teenagers who are earning money from a job or chores and need to learn account management. The downside is that the child can empty the account without your knowledge.

Some institutions offer a middle ground: a custodial account with a debit card that the child can use, but with spending limits you set. Ask your bank or credit union whether they offer this option.

Where to open the account: banks, credit unions, and online options

Traditional banks (Chase, Bank of America, Wells Fargo) have branches everywhere and offer children's accounts with no monthly fee if you meet a minimum balance, usually $300 to $500. Interest rates are very low — often 0.01% or less. The advantage is convenience: you can walk in with the child and open the account same-day.

Credit unions often have lower minimums and slightly higher interest rates than banks. You must be a member to open an account, which usually means living or working in a certain area or belonging to a specific employer or organization. If you are already a credit union member, this is often the cheapest option.

Online banks (Ally, Marcus, Discover) have no branches but offer much higher interest rates — currently 4% to 5% on savings accounts, though rates change. They have no monthly fees and no minimum balance requirements. The trade-off is that you cannot walk in to deposit cash or ask questions face-to-face. You deposit by transferring from another account or mailing a check. Online banks are the best choice if you want your child's money to actually earn interest.

The documents and information you will need

Bring or have ready your government-issued ID (driver's license, passport, or state ID) and the child's Social Security number. If you are opening in person, bring the child with you — most institutions want to see them, though they do not need an ID. If you are opening online, you will need to upload a photo of the child's birth certificate or Social Security card to verify their identity.

You will also need an initial deposit. Most banks require $25 to $100; some online banks have no minimum. You can deposit by check, transfer from another account, or cash (in person only). Some institutions offer a small bonus (usually $10 to $25) if you set up a direct deposit or transfer from another account.

Have a phone number and email address ready. The bank will use these to send statements and account alerts. If the child is old enough, you can use their email address so they see the statements too.

How interest is taxed and reported

Interest earned in a custodial account is taxed as the child's income, but you report it on your tax return until the child is old enough to file their own return (usually age 18 or 19, depending on their income). The bank will send you a 1099-INT form each January showing how much interest was earned.

The first $1,250 of a child's unearned income (interest, dividends, gifts) is usually not taxable. Income above that is taxed at the child's rate, which is often lower than yours. This is one reason to use an account with higher interest — the tax benefit is real, though the amount of interest on a child's savings is usually small.

If the account is a joint account and the child is old enough to file their own return, they may need to report the interest themselves. Ask your bank or a tax professional whether the interest will be reported under your Social Security number or the child's.

Setting up automatic deposits and teaching money habits

Once the account is open, set up a recurring transfer from your checking account to the child's savings account. This can be weekly, monthly, or whenever you want. Even $10 or $20 per month adds up and teaches the child that saving is automatic, not something you do only when you remember.

If the child is earning money (from a job, chores, or gifts), have them deposit it themselves. If the account is joint or has a debit card, let them watch the balance grow. If it is custodial and they cannot access it, show them the statements so they know the money is there and growing.

Many banks and credit unions offer free financial literacy resources for kids — videos, games, or worksheets that explain how savings accounts work. Ask whether your institution has these tools available.

Moving or closing the account later

If you switch banks or want to move the account to a different institution, you can transfer the money by requesting an ACH transfer (usually free and takes 3 to 5 business days) or by withdrawing the money and depositing it elsewhere. There is no penalty for closing a child's savings account.

When the child reaches the age of majority, a custodial account automatically converts to a regular account in their name. You will lose access, but the money stays in the account. Some institutions notify you before this happens; others do not. Mark the date on your calendar so you are not surprised.

Frequently Asked Questions

Can I open a savings account for a child without their Social Security number?

No. Banks are required by federal law to collect a Social Security number or Individual Taxpayer Identification Number (ITIN) for anyone with an account. If the child does not have a Social Security number yet, you can obtain one from the Social Security Administration — it takes about two weeks by mail or you can visit a local office.

What happens to the account when my child turns 18?

If it is a custodial account, it automatically converts to a regular account in the child's name and they gain full control. You will no longer be able to withdraw money or make decisions about the account. If it is a joint account, both of you keep access unless one of you closes it or removes the other.

Can I open a savings account for a grandchild or niece or nephew?

Yes, as long as you have their Social Security number and can provide your own ID. You will be the account owner or co-owner. Some institutions may ask for proof of relationship or guardianship, especially if you are not the parent. Call ahead to ask what documents they need.

Is a savings account or a 529 plan better for saving for college?

A 529 plan has tax advantages specifically for education (money grows tax-free if used for tuition or may have access to education expenses), but the money is locked in for education. A regular savings account is more flexible — the child can use it for anything. Many families use both: a 529 for college savings and a regular account for shorter-term goals or emergency money.

Do I need to worry about the account affecting government benefits?

If the child receives means-tested benefits like Supplemental Security Income (SSI) or Medicaid, a savings account in their name could affect their may be able to access. If this applies to your situation, speak with a benefits counselor before opening an account. Accounts in your name only (not the child's) typically do not count toward benefit limits.