To open a bank account for a child, an adult—usually a parent or legal guardian—has to be on the account, either as a joint owner or as a custodian under your state’s Uniform Transfers to Minors Act. You’ll bring photo ID for yourself, a birth certificate and Social Security card for the child, and an opening deposit. The bigger decision is which of those two account types fits your goal: shared spending money you both can access, or a pool of assets that legally belongs to the child.
Pick the Account Type First
Everything else follows from this choice, so make it before you walk into a branch or start an online application.
Joint Account
A joint account gives you and your child equal access. Either of you can deposit, withdraw, and see the balance. The child can carry a debit card and spend on their own while you watch the activity from the same login. You remain legally responsible for anything that goes wrong on the account, including fees and negative balances. Many banks offer student or youth checking and savings accounts with no monthly maintenance fee for holders under a certain age.
This structure fits older kids and teens who are learning to manage day-to-day money.
Custodial Account (UTMA or UGMA)
A custodial account works differently. The money legally belongs to the child from day one. You are the custodian, managing it on their behalf until they reach the termination age set by your state. Every deposit is an irrevocable gift: once the money goes in, you cannot take it back out for your own use.1Social Security Administration. SI 01120.205 – Uniform Transfers to Minors Act
Custodial accounts fall under one of two state laws. UGMA accounts hold financial assets: cash, stocks, bonds, mutual funds, CDs. UTMA accounts hold those same assets plus real estate, artwork, royalties, and other property.2Cornell University. Uniform Transfers to Minors Act For a normal bank account, the distinction rarely matters; your state’s law will tell you which one applies.
Custodial fits long-term saving and gifting. It does not fit money you might need back.
What to Bring to Open the Account
Federal rules require every bank to run a Customer Identification Program on each person on the account. At minimum, the bank collects a full legal name, date of birth, residential address, and taxpayer identification number for both you and the child.3eCFR. 31 CFR 1020.220 – Customer Identification Program Requirements for Banks
To verify identity, expect to show:
- An unexpired government-issued photo ID for yourself, such as a driver’s license or passport.
- The child’s birth certificate.
- The child’s Social Security card.
- An opening deposit. Minimums vary but are often modest on youth and student accounts.
Some banks ask for extra information such as your employment or income. That is bank policy, not a federal requirement.
If Your Child Doesn’t Have a Social Security Number
You can use an Individual Taxpayer Identification Number (ITIN) instead, which you obtain by filing a form with the IRS. Some banks will also accept a passport number or another government-issued identification number in place of an SSN.4Consumer Financial Protection Bureau. Can I Get a Checking Account Without a Social Security Number or Driver’s License?
Opening the Account, Step by Step
Most banks let you open a child’s account online or in person. Online, you enter the identifying information for both people, review the terms, and sign electronically. In person, the paperwork is physical but the information is the same.
When you fill out the application, enter the child’s taxpayer identification number as the primary account holder. That way any interest earned is reported to the IRS under the child’s name. Your information goes in the co-owner or custodian field.
The bank then verifies both identities against federal databases. This takes a few business days, though in-branch openings are sometimes approved on the spot. After approval, debit cards and account disclosures arrive by mail, usually within one to two weeks.
Turn Off Debit Card Overdraft Coverage
If the account comes with a debit card, this is the single most important setting to check at opening. Under federal Regulation E, a bank cannot charge an overdraft fee on a debit card purchase or ATM withdrawal unless the account holder specifically opts in.5Consumer Financial Protection Bureau. Regulation E – Section 1005.17 Requirements for Overdraft Services If you do not opt in, the card is simply declined when funds are short. No fee.
For a child’s account, leaving overdraft coverage off is usually the safer choice. You can change your mind either way at any time by contacting the bank.6FDIC. Overdraft and Account Fees One limit worth knowing: the opt-in rule covers debit card and ATM transactions only. Checks and automatic bill payments can still trigger overdraft fees regardless of your choice.
Taxes on the Interest
Interest earned in the account is taxable income belonging to the child, not to you. On a typical savings account with a small balance, this rarely produces enough interest to matter. It matters more if the balance is large or if a custodial account holds investments.
A child with unearned income (interest, dividends, capital gains) above $1,350 may need to file a federal return. Above $2,700, the “kiddie tax” applies and that portion is taxed at your marginal rate instead of the child’s.7IRS. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax) The kiddie tax applies to children under 19, or under 24 if they are full-time students.
For 2026 the tiers are:
- First $1,350: tax-free, covered by the child’s standard deduction.
- $1,351 to $2,700: taxed at the child’s own rate.
- Above $2,700: taxed at your marginal rate.
If your child’s only income is interest and dividends totaling less than $13,500, you can report it on your own return using IRS Form 8814 instead of filing a separate return for the child. To qualify, the child must be under 19 (or under 24 if a full-time student), must not file a joint return, and must not have had estimated tax payments or federal withholding during the year.8IRS. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends The election simplifies filing but may raise the total tax slightly, since some of the child’s income gets taxed at your rate.
Effect on Future Financial Aid
If college financial aid is on your radar, the account type has real consequences. A UGMA or UTMA custodial account is reported as the student’s asset on the FAFSA.9Federal Student Aid. Current Net Worth of Investments, Including Real Estate Student assets are assessed at up to 20% in the federal aid formula, so a $10,000 custodial balance can reduce aid eligibility by as much as $2,000.
Money in a parent-owned account is assessed at no more than about 5.64%. A standard joint bank account where you are the primary owner is generally treated as a parent asset, which affects aid less. If aid eligibility matters, weigh that before moving large sums into a custodial account.
What Happens When Your Child Turns 18
The two account types diverge sharply at adulthood.
On a joint account, bank policies vary. Some banks automatically convert the youth account to a standard adult account and drop the parent off. Others want both holders to come into a branch. In some cases you’ll need to close the joint account and open a new individual account in the child’s name. Call the bank before the birthday to find out its process.
On a custodial account, the transfer to the child is not optional. UTMA and UGMA accounts must be turned over at the termination age set by state law, which ranges from 18 to 22; roughly half of states use 21, the rest 18 or 19.2Cornell University. Uniform Transfers to Minors Act Once the child reaches that age, you have no authority over the account. The bank will typically freeze activity on the birthday until the new adult owner tells it what to do: keep the account, move it, or close it and take the balance as a check. Because custodial transfers are irrevocable, you cannot hold the money back if you think the child isn’t ready.1Social Security Administration. SI 01120.205 – Uniform Transfers to Minors Act