Yes, a minor can have their own bank account, but almost every U.S. bank requires a parent or legal guardian to sit on the account as a co-owner or custodian until the child turns 18. Federal banking rules do not bar minors from being account holders outright; state contract law and bank policy are what make an adult’s involvement a practical requirement.
Why an Adult Has to Be on the Account
A bank account is a contract, and under the legal principle known as the infancy doctrine, people under 18 generally lack the capacity to be bound by one. A minor can walk away from the agreement, making it “voidable” at their option, while the bank cannot. In practice, that means a minor could disavow responsibility for overdraft charges or a negative balance and leave the bank with no way to collect.
Banks handle that risk by requiring an adult to join the account. The adult takes on full legal responsibility for activity on the account, including any debts it generates. Federal rules reinforce the arrangement: under the Customer Identification Program, when a parent opens an account on behalf of a child, the parent is treated as the bank’s “customer” for identity-verification purposes.1FinCEN. FAQs: Final CIP Rule Some banks market teen checking or savings products for ages 13 to 17, but those still require a parent or guardian on the account.
Joint Account or Custodial Account
Families usually choose between two structures, and the right one depends on how much control the child needs day to day and what the money is for.
Joint Accounts
A joint account lists the adult and the minor as co-owners. Both can deposit and withdraw, and either can use a linked debit card. The FDIC treats co-owners as having equal rights to the entire balance, so neither needs the other’s permission to move money.2Federal Deposit Insurance Corporation. Joint Accounts This setup works well for a first debit card, part-time job earnings, and hands-on lessons in managing money.
The tradeoff is creditor exposure. Because the adult is a legal co-owner, the funds can be reached by the adult’s creditors. In many states, a creditor holding a judgment against one co-owner can garnish the entire joint account, including deposits made by the other co-owner, unless the non-debtor can prove which funds are theirs. That challenge is possible but usually requires prompt legal action.
Custodial Accounts (UGMA and UTMA)
Custodial accounts are established under either the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, both adopted in some form by every state. The adult acts as custodian and manages the assets solely for the child’s benefit. The money legally belongs to the child from the moment it is deposited and is treated as an irrevocable gift. It cannot be taken back.
The custodian has a fiduciary duty to spend only for the child’s benefit, and the minor has no direct access to the funds. Control transfers to the child at the age of termination set by state law: typically 18 for UGMA accounts and 21 for UTMA accounts, with some states allowing extensions up to 25 if that is specified when the account is opened. Because the assets belong to the child rather than the adult, they are generally not reachable by the custodian’s personal creditors.
The FAFSA Tradeoff
If college financial aid is on the horizon, the account type matters. Custodial account assets are reported as the student’s on the FAFSA and reduce aid eligibility at a rate of 20 percent of net value; every $10,000 in a custodial account can cut a financial aid package by roughly $2,000. Parent-owned assets are assessed at a rate that maxes out at 5.64 percent, so a joint account where the parent is a co-owner is usually treated more favorably. Some families deliberately keep college savings in a joint account for this reason, despite the creditor exposure.
What You Need to Open the Account
Federal law requires banks to collect four pieces of identifying information from each account holder: name, physical address, date of birth, and a taxpayer identification number, typically a Social Security number.3eCFR. 31 CFR 1020.220 – Customer Identification Program Requirements for Banks The adult verifies identity with an unexpired government-issued photo ID such as a driver’s license or passport.
For the minor, the rules are more flexible. Banks use risk-based procedures, and the acceptable documents vary: a birth certificate, school ID, Social Security card, or passport may all work depending on the institution.1FinCEN. FAQs: Final CIP Rule Call ahead to confirm what your bank accepts, and bring more than the minimum.
You can usually apply online or in a branch. Most banks require a small opening deposit, often $25 to $100 depending on the account. Many teen and student accounts charge no monthly maintenance fee while the holder is under 18 or enrolled in school; if the account carries a fee, it is commonly waived by meeting a balance or deposit condition. Waivers tied to student status often expire in the mid-twenties or when proof of enrollment stops.
Everyday Limits and Overdraft Rules
Banks typically impose lower daily ATM withdrawal caps and point-of-sale limits on accounts held by minors. The adult co-owner can usually adjust these through the bank’s online portal or by calling customer service, up to the bank’s own maximums.
Overdraft protection carries a federal rule worth knowing. Under Regulation E, a bank cannot charge you a fee for covering an ATM or one-time debit card transaction that exceeds your balance unless the account holder has opted in to that service.4Consumer Financial Protection Bureau. 12 CFR 1005.17 – Requirements for Overdraft Services On a joint account, any co-owner’s opt-in counts as consent for the whole account, and any co-owner’s revocation withdraws it. To prevent overdraft fees on a teen’s debit card, make sure no one on the account has opted in, or ask the bank to decline transactions that would overdraw the balance.
Taxes on Interest a Minor Earns
Interest earned in a minor’s account is taxable income and is generally reported under the child’s Social Security number. The bank issues a Form 1099-INT to the child if the account earns more than $10 in interest during the year.
For 2026, the IRS applies “kiddie tax” thresholds to a child’s unearned income, which includes interest and dividends:5IRS. Revenue Procedure 2025-32
- The first $1,350 is tax-free, covered by the child’s standard deduction.
- The next $1,350 is taxed at the child’s own rate.
- Anything above $2,700 is taxed at the parent’s rate, which is usually higher.6IRS. Topic No. 553 – Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax)
A minor with a simple savings account will almost always earn far less than $1,350 in interest and owe nothing. If a child does have a large custodial balance producing meaningful interest, parents can elect to include the child’s unearned income on their own return using IRS Form 8814, as long as the child’s total gross income is between $1,350 and $13,500 and consists only of interest and dividends.6IRS. Topic No. 553 – Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax)
What Happens at 18
Turning 18 does not automatically hand a young adult a solo account. The next step depends on the structure.
A joint account stays a joint account until someone changes it. To remove the parent and convert to an individual account, both people typically need to visit a branch with government-issued ID. Some banks will close the joint account and open a new one in the young adult’s name alone, sometimes on a different product with different fees. Contact the bank around the 18th birthday to find out which path applies.
A custodial account has a legally mandated termination date. UGMA accounts terminate at 18 in roughly half of states and at 21 in most of the rest. UTMA accounts typically terminate at 21, with several states allowing the donor to specify a later age up to 25. When the child reaches the termination age set by their state, the custodian is legally required to transfer full control, and the young adult becomes the sole owner with unrestricted access. The termination age is set by state law, not by bank policy, so check your state’s version of the UGMA or UTMA if you are unsure which applies.