Opening a savings account for a child typically requires a parent or legal guardian to visit a bank or credit union (in person or online), provide identification for both themselves and the child, and make an initial deposit. Most banks let you open an account for a child of any age, including newborns, and the whole process can take as little as 10 to 15 minutes once you have your documents ready.
What You’ll Need to Bring
Banks need to verify the identity of both the adult and the minor before opening an account. For yourself, expect to provide a government-issued photo ID (driver’s license, passport, or military ID), your Social Security number, and proof of your home address such as a utility bill. For your child, you’ll typically need their full legal name, date of birth, and Social Security number. Some banks also ask for a birth certificate or, for older children, a school ID card.
If your child doesn’t have a Social Security number yet, you’ll need to apply for one through the Social Security Administration before most banks will open the account. This is common with newborns since the SSN application at the hospital can take a few weeks to process.
Choose the Right Type of Account
You have two main options: a joint minor savings account or a custodial account. They work differently in terms of who owns the money and who controls it as the child grows up.
Joint Minor Savings Account
This is the most common choice. The parent opens a standard savings account with the child listed as a joint owner. You maintain full control over deposits and withdrawals, and you can close the account at any time. When your child reaches 18, they can typically take over the account on their own. This setup works well if you want flexibility and the ability to manage the money until your child is ready.
Custodial Account (UGMA/UTMA)
A custodial account, set up under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA), works differently in one critical way: money you put in becomes an irrevocable gift to the child. That means once you deposit funds, you can’t take them back for your own use. You manage the account and make investment or savings decisions, but withdrawals must be used for the child’s benefit.
When the child reaches the age of majority, which ranges from 18 to 25 depending on your state and how the transfer was set up, full control of the account transfers to them. At that point, they can use the money for anything, not just education. This structure is better suited for families who want to formally set aside money that belongs to the child, but it does mean you give up the ability to redirect those funds later.
Where to Open the Account
You can open a child’s savings account at a traditional bank, an online bank, or a credit union. The differences come down to interest rates, fees, and convenience.
Credit unions often offer the highest rates on youth savings accounts, though those elevated rates typically apply only to a small balance. For example, some credit unions pay rates between 5% and 10% APY, but only on the first $500 or $1,000 in the account. Anything above that cap earns a much lower rate. If you plan to keep a modest balance, these accounts are a great deal. If you’re saving larger amounts, the rate advantage shrinks quickly.
Online banks and larger national banks tend to offer lower rates, in the 2% to 3% APY range, but often with no balance cap. Capital One, for instance, offers 2.50% APY on any balance with no monthly maintenance fee. The tradeoff is fewer in-person interactions, which may matter if you want your child to experience walking into a bank and making deposits.
Monthly fees are rare on children’s savings accounts. Most banks and credit unions waive maintenance fees entirely for minors, so you generally won’t need to worry about the account costing money to keep open.
How to Open the Account Step by Step
Once you’ve picked a bank and gathered your documents, the process is straightforward:
- Apply online or in person. Many banks let you open a child’s account through their website. Some require the parent to visit a branch, especially for children under 13. Check before you go.
- Provide identification. Enter or hand over the documents for both you and your child. The bank will verify identities and run any required checks.
- Make the initial deposit. Some accounts require a minimum opening deposit, which could be as low as $1 or $5 at many institutions. Others have no minimum at all.
- Set up online access. If you want to manage the account digitally, register for online or mobile banking. Some banks let teens have their own login once they reach a certain age.
Tax Rules for Children’s Savings
Interest earned in your child’s savings account is considered the child’s income for tax purposes. For most families, this won’t matter much. Children can earn a certain amount of unearned income (interest, dividends, and similar gains) each year before any tax is owed. Below that threshold, no return needs to be filed for the child.
Above the threshold, the “kiddie tax” rules apply: the child’s unearned income gets taxed at the parent’s marginal rate. On a standard savings account with a few hundred or even a few thousand dollars, the interest earned is unlikely to trigger any tax obligation. But if you’re putting substantial amounts into a custodial account that also holds investments, it’s worth tracking.
The bank will report interest to the IRS under the child’s Social Security number, so you’ll receive a tax form if the interest exceeds $10 in a given year.
Making the Account a Teaching Tool
A savings account is one of the first financial tools your child will interact with, and how you use it matters more than where you open it. Let your child see the balance grow. Show them how interest adds money they didn’t deposit. For younger kids, matching their deposits dollar for dollar can reinforce the habit of saving. For teenagers, giving them limited access to make their own deposits and watch their progress builds ownership over the process.
Many banks offer apps that let kids track their balance and set savings goals, which can make the experience more tangible than a paper statement that arrives once a month. If your child is old enough to earn money from chores, gifts, or a part-time job, routing some of that income into their account turns saving from an abstract concept into a real habit.