In almost every state, the minimum age to open a high yield savings account in your own name is 18. That’s the age at which you can sign a binding contract with a bank, which is what opening an account actually requires. If you’re younger, you can still earn the same rates — but the account has to be set up as a custodial account or a joint account with an adult.
Why 18 Is the Standard
A savings account is a contract between you and the bank. Minors can generally back out of contracts they’ve signed, so banks won’t open accounts for people under 18 on their own. Turn 18, and you have the legal capacity to be held to a bank’s terms.
A few states set their general age of majority higher, but they all carve out an exception for contracts, which keeps 18 as the working threshold. Alabama’s age of majority is 19, yet state law allows any 18-year-old of sound mind to enter a binding contract that can’t be voided on the basis of age.1Alabama Legislature. Alabama Code 26-1-1 – Age of Majority Designated as 19 Years Nebraska declares people under 19 to be minors, then explicitly permits 18-year-olds who aren’t wards of the state to enter contracts and leases.2Nebraska Legislature. Nebraska Revised Statutes 43-2101 – Persons Under Nineteen Years of Age Declared Minors Mississippi defines “minor” as anyone under 21 for most purposes, but drops the cutoff to 18 for statutes involving contracts affecting property.3Justia. Mississippi Code 1-3-27 – Minor An 18-year-old can sign for a savings account in every state.
Emancipated Minors
If a court has granted you emancipation before you turn 18, you generally have the legal capacity to enter contracts, including opening a bank account, on your own. Rules vary by state, but emancipation typically gives a minor the same rights as an adult for business transactions and property. Banks don’t all handle this the same way, so expect to bring your emancipation order and be ready to explain it when you apply.
If You’re Under 18
There are two ways to get your money into a high yield savings account before you turn 18. Both require an adult to be involved.
Custodial Accounts (UGMA and UTMA)
A custodial account lets an adult, usually a parent or grandparent, manage money that legally belongs to a minor. These accounts are opened under either the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, depending on the state. The adult custodian controls deposits, withdrawals, and investment decisions until you reach the termination age, at which point the custodian is required to hand the funds over to you.4FINRA.org. 2019 Report on Examination Findings and Observations – UTMA and UGMA
Termination ages vary. In most states, the custodian can end the account when the minor turns 18 or 21. Some states allow a later age: Florida, Ohio, Oregon, California, Nevada, and several others permit termination as late as 25. Wyoming allows up to 30. Whatever age applies, once you reach it the custodian loses authority and the assets are yours.
Joint Accounts With a Parent or Guardian
A joint account is the simpler setup. You and an adult share ownership of the account, and either of you can deposit or withdraw. The adult satisfies the bank’s requirement for a legally responsible party while you get hands-on experience managing the money. The adult also remains legally responsible for everything that happens on the account, including fees and overdrafts.
Moving to Your Own Account at 18
The handoff looks different depending on which type of account you have.
With a custodial account, the financial institution should transfer the assets into an account in your name once you reach the termination age. Many firms send a notification as you approach that date, and some track it through automated systems.4FINRA.org. 2019 Report on Examination Findings and Observations – UTMA and UGMA If you haven’t heard from the bank or brokerage by your termination date, contact them to start the transfer yourself.
Joint accounts don’t convert automatically. Once you turn 18 you can open your own individual high yield savings account and move your funds. Some banks let you remove the co-owner from the existing account; others require you to close it and open a new one. Ask your bank which applies.
What You’ll Need to Apply
Federal law requires banks to verify the identity of everyone who opens an account.5Financial Crimes Enforcement Network. USA PATRIOT Act Before the account is created, the bank must collect your name, date of birth, address, and an identification number such as a Social Security number or Individual Taxpayer Identification Number. You’ll also need a government-issued photo ID; a driver’s license or passport is the usual choice.6FDIC. Customer Identification Program
For a custodial or joint account, the bank runs the same checks on the adult account holder. The minor generally needs a Social Security number too, because the bank will report interest income to the IRS under that number.
If You Don’t Have a Social Security Number
You are not required to have a Social Security number to open a savings account. An Individual Taxpayer Identification Number works in its place, and some banks also accept a passport number with the country of issuance or an alien identification card number.7Consumer Financial Protection Bureau. Can I Get a Checking Account Without a Social Security Number or Drivers License Policies vary, so contact the bank first to confirm what it accepts.
Deposit Insurance for Minor Accounts
Money in a high yield savings account at an FDIC-insured bank is protected up to $250,000 per depositor, per bank, for each ownership category. For a joint account, each co-owner’s share is insured separately up to $250,000, so a parent-child joint account can be covered for up to $500,000. Custodial accounts are insured separately from the custodian’s own personal accounts, which gives the minor their own $250,000 of coverage at that bank.8Federal Deposit Insurance Corporation (FDIC). Your Insured Deposits If your savings are at a credit union, the National Credit Union Administration provides the same $250,000 per-depositor protection.