Opening a bank account in your child’s name can help them learn how to save money and budget for big purchases. But minors will need a parent as a joint account holder.

How to open a kids bank account

Minors can’t open a bank account by themselves. They’ll need a parent or guardian listed on the account as a joint owner. Specific steps vary by institution, but this is generally how you can open a kids bank account:

  1. Compare accounts at various banks and credit unions until you find the one that’s right for you.
  2. Gather your financial documents, including your driver’s license and Social Security number, so they’re readily available when you go to apply.
  3. Apply for the account either in-person, online, or over the phone. Most kid bank accounts require you to visit a local branch to get started. But there are a handful of institutions that let you apply online.
  4. Fund your account by making your initial deposit.
  5. Activate your kid’s debit or ATM card when it comes in the mail.

Documentation needed to open a bank account for your kids

Opening a bank account for your child is easy, but you will need to supply a couple of important pieces of documentation before your kid can start making deposits. What documents you’ll need may vary from bank to bank but will likely include some combination of:

  • Your driver’s license
  • Your Social Security number
  • Your child’s Social Security number
  • Your child’s birth certificate
  • Proof of address

How old do you have to be to open a kid's bank account?

Generally, the parent or guardian must be at least 18 years old, and the child must be under the age of 18 to open a kids bank account. But some banks may impose stricter age requirements for kids. For example, the Citizens Bank College Saver account is for children under the age of 12, while the Wells Fargo Teen Checking account is for kids age 13 to 17.

Can I open a kid's account online?

It depends on the bank. While some banks will let you open an account online, others will require you to visit your nearest branch in person to prove your identity. If you’re able to open an account online, you may be asked to upload photos proving your child’s identity.

Can parents withdraw money from their child’s bank account?

Even though a kid's bank account is in the child’s name, the parent has full access to the account as a joint owner. This means that they can deposit and withdraw funds as they wish. The only exception is if the bank account is jointly owned by another family member — such as a grandparent or aunt, or uncle.

Are there any tax implications to opening a bank account for a child?

Yes, there can be tax implications for any unearned income, including interest, dividends, and capital gains. How taxes work will depend on what type of account you’re setting up.

  • Savings accounts. If your child makes more than $2,100 in unearned income in a year, including interest and dividends, they may need to pay taxes.
  • Custodial accounts. If a UGMA or UTMA account makes more than $2,100 in unearned interest in a year, the account holder will likely need to pay taxes.
  • Trust funds. The beneficiary of a trust fund is responsible for paying taxes. Trusts are taxed as income when distributed, and taxation guidelines can vary based on the size of the trust and fluctuating tax laws. If you’re considering setting up a trust fund, talk with your accountant to learn more about how it’ll be taxed.

What are the tax implications of opening a kid's bank account?

Once your child’s bank account starts earning interest, their investment income is subject to what is referred to as the “kiddie tax.” Any investment earnings over $2,100 are taxed at the rates that apply to trusts and estates. This kiddie tax applies to investment income of children under 19 years old and full-time college students under the age of 24.

Here are the rates for 2019:

If taxable income is between:The tax due is:
$0 – $2,600
$2,601 – $9,300
$9,301 – $12,750
$12,751 +

Who declares interest income from a child’s bank account?

It depends. If they make more than $10,500 a year in interest and other unearned income, the child will need to file an income tax return — or you’ll need to file one in their name — using form 8615. If they make less than $10,500 a year, you can either file in your child’s name or report it on your own income taxes using form 8814.

How long is someone considered a child for tax purposes?

Unearned interest is subject to the Kiddie Tax if someone is:

  • Under 18 at the end of the tax year
  • 18 at the end of the tax year, but less than half their support is earned income
  • A full-time student under age 24

Additional requirements can apply in some circumstances. To determine if you or your child needs to file a tax return, visit the IRS Kiddie Tax webpage.

Gifting money to a child’s account

As of 2019, if you gift more than $15,000 to a single person in a year, you’ll need to file a gift tax return with the IRS. If you have a spouse, they can also gift up to $15,000 per year before they need to file taxes.

Comparing accounts

There are several factors you should consider when comparing children’s bank accounts, including:

  • The minimum age
  • What happens to the account when your child turns 18
  • The interest rate
  • Ongoing account-keeping fees
  • Withdrawal fees and any other hidden fees
  • Whether a debit card is provided
  • Minimum and maximum balance requirements

What is a kid’s bank account?

A kid’s bank account works pretty much like an adult’s bank account, but a parent will need to be listed as a joint account owner. Your child can make deposits and withdrawals into and from their account, and they can earn interest on money kept in a savings account. If they’re opening a checking account, they’ll likely have a much lower spending limit on their debit card, and some banks will allow you to track their purchases online.

Children’s bank accounts generally won’t charge any ongoing monthly fees, but you should always check with your bank to make sure.

What kind of kid's bank accounts are available?

There are savings and checking accounts available for children, though checking accounts tend to have a higher minimum age. Many banks offer savings accounts for children of any age, including accounts for babies.

You can also open an account that your kid won’t have access to until they come of age, usually 18 or 21, depending on your state. A custodial account allows you to continue adding money as your kid grows up so that they can use it to pay for college or any other expense when they’re older.

Bottom line

Kids bank accounts are offered by a wide range of US banks and credit unions. Opening an account with your current financial institution can help save time, but it’s worth shopping around to see which account offers the best interest rates and features. Compare children’s bank accounts to find one that’s the right fit.

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