How to Open a Child Bank Account: Documents, Taxes, and Fees

To open a bank account for a child, you’ll need an adult co-owner or custodian because minors generally cannot enter into binding contracts on their own.¹ The first decision is whether to open a joint account, where you and your child both own the money, or a custodial account, where the money legally belongs to the child and you manage it as a fiduciary. Once you’ve chosen, the process is straightforward: gather identification and Social Security numbers for both of you, apply online or at a branch, and fund the account with an opening deposit.

Pick the Account Type First

A joint account is shared ownership. Both you and your child are legal owners, and either of you can deposit or withdraw money independently. This setup works well for teaching a teenager how to manage daily spending, since you see every transaction in real time. The trade-off is exposure: because both names are on the account, a creditor with a judgment against the adult co-owner can potentially levy the funds, including money the child deposited.

A custodial account operates under the Uniform Transfers to Minors Act or the older Uniform Gifts to Minors Act, adopted in some form by nearly every state. The money belongs to the child irrevocably. Once you deposit funds, you can’t take them back, and every decision you make as custodian has to be for the child’s benefit. When the child reaches the age set by your state’s law, the custodianship ends and the young adult takes full control.²

You don’t have to be a parent to open a custodial account. Grandparents, aunts, uncles, and family friends can all establish one and serve as custodian, and any adult can make gifts into an existing custodial account. For a joint account, banks typically require a parent or legal guardian as the adult co-owner.

What to Bring

Federal anti-money laundering rules require banks to verify the identity of everyone on a new account. Under the Customer Identification Program, the bank must collect each account holder’s name, date of birth, address, and taxpayer identification number.³ In practice:

For the child: full legal name, date of birth, and Social Security number. Many banks also ask for a birth certificate.
For the adult: a valid, unexpired government-issued photo ID such as a driver’s license or passport, plus your Social Security number.
Address: the federal rule requires a residential or business street address for each account holder. Individual banks may ask for a utility bill or lease to verify it, but that’s a bank policy, not a federal requirement.³

If your child doesn’t have a Social Security number, an Individual Taxpayer Identification Number works as an alternative. Banks can accept an ITIN anywhere a taxpayer identification number is required.⁴

On the application, designate your role clearly. For a custodial account, you’re the custodian. For a joint account, you’re a co-owner. That designation determines how the bank reports interest income to the IRS and how the account is treated if either party faces a legal claim.

Submit the Application

You can apply online or in person at a branch. Online, you’ll enter the required information for both you and the child, upload identification documents, and submit through the bank’s secure portal. In person, a banker handles the data entry and scans your documents on the spot. Either way, expect to sign a signature card that serves as your agreement to the bank’s terms. Some banks let older children sign as well.

Most institutions require an initial deposit, typically between $25 and $100, to activate the account.⁵ You can fund it through an electronic transfer from an existing account or with cash at the branch.

After submission, the bank runs its verification. That includes confirming Social Security numbers and, for the adult, checking reporting databases like ChexSystems that track banking history. If you’ve had accounts closed involuntarily or unresolved overdrafts in the past, this is where problems surface. Verification usually takes one to three business days. Once approved, you’ll receive the account agreement and disclosures by mail or email, and debit cards typically arrive within a week or two.

Taxes on the Interest

Interest and other investment earnings in a child’s account belong to the child for tax purposes, whether the account is joint or custodial. In some cases the earnings are taxed at your rate rather than the child’s.

For 2026, the first $1,350 of a child’s unearned income (interest, dividends, and capital gains) is tax-free. The next $1,350 is taxed at the child’s own rate. Anything above $2,700 triggers what the IRS calls the “kiddie tax,” meaning the excess is taxed at the parent’s marginal rate.⁶ The kiddie tax applies to children under 19, or under 24 if they’re full-time students.

If your child’s unearned income exceeds $1,350 in 2026, a tax return is generally required.⁷ You can avoid filing a separate return for the child by electing to report the income on your own return using IRS Form 8814, but only if the child’s total income falls between $1,350 and $13,500 and comes entirely from interest and dividends.⁶ A basic savings account earning modest interest won’t come close to these numbers, but a custodial account holding investments or receiving large gifts can.

If College Aid Is on the Horizon

The account type you choose now can affect financial aid later. On the FAFSA, custodial accounts under UTMA or UGMA are counted as the student’s asset, not the parent’s. Student assets are assessed at a significantly higher rate than parent assets when calculating aid eligibility. The federal formula expects about 20 percent of a student’s assets to go toward college costs, compared to about 5.6 percent of a parent’s assets.

The practical effect: $10,000 in a custodial account could reduce your child’s aid package by around $2,000, while the same $10,000 in a parent-owned account would reduce it by roughly $560. If college savings is the primary goal, a 529 education savings plan owned by a parent is assessed at the lower parent rate and offers tax-free growth for qualified education expenses. Custodial accounts give the child more flexibility in how the money is spent, at this cost.

Fees and App Access for Younger Kids

Most banks waive monthly maintenance fees on accounts designed for minors. The bigger fee risk is overdraft charges. For debit card purchases and ATM withdrawals, federal rules require the bank to get your explicit opt-in before it can charge overdraft fees. If you don’t opt in, the bank simply declines transactions that would overdraw the account, and no fee is assessed.⁸ For a child’s account, declining the opt-in is almost always the right call. Checks and automatic bill payments aren’t covered by this opt-in rule, but those are uncommon on minor accounts.

For children under 13, banks face an extra layer of compliance when offering mobile apps or online account access. The Children’s Online Privacy Protection Act restricts commercial websites and apps from collecting personal information from children under 13 without parental consent.⁹ Some banks don’t offer mobile banking access to younger children at all; others route everything through the parent’s login. Teens 13 and older can usually get their own online access.

What Happens When Your Child Grows Up

For a custodial account, the transition is automatic and non-negotiable. Once the child reaches the transfer age set by state law, the custodianship ends and the money is theirs.² You have no further authority over the funds. That transfer age is typically 21, though it ranges from 18 to 25 depending on the state and, in some states, the age the donor specified when creating the account. You cannot extend the custodianship, redirect the funds, or claw back earlier deposits.

Joint accounts have no automatic transfer moment. The account continues as a regular joint account between two adults, and both parties keep equal access. Either party can typically request to be removed, or the child can open a new individual account and transfer the funds. Many families treat this as the natural point to close the joint account and let the young adult manage their own finances.

1
Legal Information Institute (LII) / Cornell Law School. Legal Age
2
Cornell Law School Legal Information Institute. Uniform Transfers to Minors Act
3
eCFR. 31 CFR 1020.220 – Customer Identification Program Requirements for Banks
4
Consumer Financial Protection Bureau. Can I Get a Checking Account Without a Social Security Number or Drivers License
5
Consumer Financial Protection Bureau. Checklist for Opening a Bank or Credit Union Account
6
Internal Revenue Service. Tax on a Childs Investment and Other Unearned Income (Kiddie Tax)
7
Internal Revenue Service. Rev. Proc. 2025-32
8
FDIC. Overdraft and Account Fees
9
Federal Trade Commission. Complying With COPPA: Frequently Asked Questions