Guide

How to Open a Bank Account for Minors

How to Open a Bank Account for Minors
Written by Publishing Team

  • A child savings account must usually be opened along with someone over the age of 18.
  • Once your child reaches a certain age, you may need to open a new account.
  • Before you open a bank account for a minor, be sure to set a clear goal for the account.
  • Read more stories from Personal Finance Insider.

If you think your child is ready to manage money, creating a bank account may be a useful tool for teaching your child how to save for financial goals.

Below, we’ll guide you through the process of opening a bank account for your child, as well as provide tips and guidelines to help them manage it.

What is a child’s bank account?

A child’s bank account is a type of bank account shared between a child and another person.

There are no federal laws that prevent a minor from opening a bank account on their own. However, there are state laws that state that a minor’s bank account must be opened by a person 18 years of age or older.

If you live in a state that does not have a minimum age in state law, most financial institutions will still have a policy that states that an adult is required to open the account.

There are basically two common bank account options: Child Savings Accounts and Teen Savings Accounts


checking account

. Depending on where you bank, you may need to open a traditional savings account or a specialized bank account designed just for kids.

A children’s savings account will earn a little interest on the money deposited. The amount of interest you will earn depends on the institution.


Online Banks

And


credit unions

They usually offer higher rates than traditional banks.

Kids checking accounts include debit or ATM cards and are better for multiple monthly transactions. However, most accounts require the child to be at least 13 years old.

At some financial institutions, you may also see trust accounts. A guardian bank account is no different from a traditional bank account for a child. Custody accounts are a type of investment account, and the child will take ownership of the account after the age of 18.

What to look for in a child’s bank account

Eileen King, CFP, founder of Family and Money Matters, advises parents to set a clear purpose for an account before creating it.

“Let’s say there’s a 10-year-old. A savings account would be best. I can’t see the kid going to an ATM, so it’s going to be a savings account. Then after a while, I’ll open a brokerage account for that kid,” King says.

Expanding on the example, King suggests parents introduce savings accounts as a first step to teaching kids how money can grow. Then, as a second step, the parent can submit the investment.

King also says, in her experience, that the best account choice will depend on the parents’ banking habits.

“The best example — to have good financial literacy — would be the parents. If a parent goes to the bank, teach your child to go to the bank. If the parent practices internet banking, open the child’s internet banking,” says King. “The easiest thing is to talk to your or your investment banker and ask them to open an account for your child. In that sense, you’re doing something that you know yourself as a parent, and you’re amplifying the relationship.”

How to open a bank account for a minor

To open a bank account for a minor, one of the individuals who signed up for the account must be over 18 years old. You will likely need the following documents to open an account online or at a branch:

  • US adult ID card (examples: driver’s license, passport)
  • Adult Social Security Number (check these options if you don’t have a US ID)
  • Current adult bank account number (Banks usually link children’s accounts to parents’ accounts)
  • Child’s US ID card (examples; Social Security card, birth certificate, school ID, passport)
  • Initial deposit (Banks usually require $0 to $25 to open an account)

How can you monitor a minor’s bank account

Some children’s bank accounts have special parental control features. For example, some of the options mentioned in our Best Savings Accounts for Kids guide allow parents to set limits or alerts when a child withdraws a set amount of money.

If you choose to open a children’s bank account, the financial institution will include account age limits. Once your child reaches a certain age (usually 13 or 18), your child will have to transfer the money to a new account, or the bank will automatically enroll the child in a traditional savings account.

Additional Tips for Teaching Kids about Financial Literacy

Before you open a bank account for your child, King recommends parents teach kids the value of money.

“If I’m a kid and my mom puts money in a savings account, it means nothing to me. I don’t know how hard she had to work for it or the value of $10. For a young child, $10 is a lot of money,” King told Insider.

King also says that when parents set aside money for financial goals, they should have open communication with children about money so that they can understand and appreciate why the money is being saved.

King says parents could say, for example, “Look, we were going to spend $100. But we’re going to spend $80, so we’re going to put it into your savings account for $20, and that’s yours to college.” In this way, the child realizes that the money is being used for a specific purpose.

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