To open a bank account for a child, an adult—usually a parent or legal guardian—opens the account alongside the child as either a joint owner or a custodian under state law. You’ll bring your government photo ID, the child’s birth certificate, and the child’s Social Security number, make an initial deposit, and decide upfront which structure fits: a joint account you both use day to day, or a custodial account that legally belongs to the child.
Joint Account or Custodial Account
Pick the structure before you pick the bank. The two options work very differently.
Joint Account
A joint account gives you and your child equal access. Either of you can deposit, withdraw, and check balances, and the child can carry a debit card while you monitor activity. You stay legally responsible for fees and negative balances. This structure suits older kids and teens learning to handle everyday spending. Many banks offer specific youth or student checking and savings accounts with no monthly maintenance fee for account holders under a certain age. Joint accounts are FDIC-insured up to $250,000 per co-owner at each bank, assuming each co-owner has equal withdrawal rights and appears on the account records.1FDIC. Joint Accounts
Custodial Account
A custodial account operates under the Uniform Transfers to Minors Act (UTMA) or the older Uniform Gifts to Minors Act (UGMA).2Cornell University. Uniform Transfers to Minors Act The money legally belongs to the child from the moment you deposit it. You serve as custodian, managing the account for the child’s benefit until they reach the termination age set by your state.
UGMA accounts hold financial assets only: cash, stocks, bonds, mutual funds, and CDs. UTMA accounts hold those plus real estate, artwork, royalties, and other property.2Cornell University. Uniform Transfers to Minors Act
Every deposit into a custodial account is an irrevocable gift. Once the money goes in, you cannot take it back.3Social Security Administration. SI 01120.205 – Uniform Transfers to Minors Act That single fact—plus the tax and financial-aid consequences below—is why the choice matters.
What You’ll Need to Bring
Federal rules require the bank to run a Customer Identification Program on every account holder, which means collecting a full legal name, date of birth, residential address, and taxpayer identification number for each of you.4eCFR. 31 CFR 1020.220 – Customer Identification Program Requirements for Banks
In practice, that translates to:
- Your unexpired government-issued photo ID (driver’s license or passport)
- Your Social Security number
- The child’s birth certificate
- The child’s Social Security card
- A residential address for each of you
Individual banks may ask for more, such as employment or income information. Those extras aren’t required by federal regulation; each bank sets its own policy above the federal floor.
If your child doesn’t have a Social Security number, an Individual Taxpayer Identification Number (ITIN) from the IRS works, and some banks will accept a passport number or other government-issued identification number.5Consumer Financial Protection Bureau. Can I Get a Checking Account Without a Social Security Number or Driver’s License?
Opening the Account
Most banks let you apply online or at a branch. Either way, you’ll enter identifying information for both people, review the terms, and sign. The bank then verifies both identities against federal databases, which usually takes a few business days. In-person openings can be approved almost immediately.
When you fill in the form, put the child’s taxpayer ID number as the primary account holder so interest gets reported to the IRS under the child’s name. Your information goes in the co-owner or custodian field. Fund the account with the required initial deposit—minimums are usually modest for youth and student accounts—and expect debit cards and disclosures to arrive at your address within one to two weeks.
Overdraft Opt-In: Say No
If the account comes with a debit card, this matters. Under federal Regulation E, a bank cannot charge overdraft fees on debit card purchases or ATM withdrawals unless you specifically opt in.6Consumer Financial Protection Bureau. Regulation E – Section 1005.17 Requirements for Overdraft Services If you don’t opt in, the bank simply declines the transaction when funds are short. No fee.
For a child’s account, declining is almost always safer than paying $30 or more per accidental swipe. You can opt out later if you already said yes.7FDIC. Overdraft and Account Fees One catch: the opt-in rule covers only debit card and ATM transactions. Checks and automatic bill payments can still trigger overdraft fees regardless of your choice.
Taxes on the Interest
Interest in the account is the child’s income, not yours. For a plain savings account with a small balance, this rarely matters. Once the numbers get larger—especially in a custodial account holding investments—the rules kick in.
For 2026, unearned income (interest, dividends, capital gains) is taxed in tiers:
- The first $1,350 is covered by the child’s standard deduction and isn’t taxed.
- The next slice, up to $2,700, is taxed at the child’s own rate.
- Anything above $2,700 is taxed at your marginal rate under the “kiddie tax.”8IRS. 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’re full-time students.
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.8IRS. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax) To make that election, the child must be under 19 (or under 24 as a full-time student), must not file a joint return, and must not have had estimated tax payments or federal withholding.9IRS. Instructions for Form 8814 – Parents’ Election To Report Child’s Interest and Dividends It’s simpler, but some of the child’s income ends up taxed at your higher rate.
The Financial Aid Trade-Off
If college aid is in the picture, the account type has real weight. UGMA and UTMA custodial accounts are reported as the student’s assets on the FAFSA.10Federal 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 cut aid eligibility by as much as $2,000.
Money in a parent’s own 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 and hits aid eligibility much less. If maximizing aid matters to you, weigh that before moving large sums into a custodial account.
What Happens When Your Child Turns 18
The handoff depends on the account type.
On a joint account, bank policies vary. Some banks automatically convert a youth account to a standard adult account and remove you. Others make both owners visit a branch to take you off. A few require closing the joint account and opening a new individual one in the child’s name. Call your bank before the birthday so you know its process.
Custodial accounts must be turned over to the child at the termination age set by state law, which ranges from 18 to 22. Roughly half of states set it at 21; the rest use 18 or 19.2Cornell University. Uniform Transfers to Minors Act Once your child reaches that age, your authority ends. They gain full control and can spend, invest, or withdraw the money however they want.
Because custodial transfers are irrevocable, you cannot delay the handover if you don’t think the child is ready.3Social Security Administration. SI 01120.205 – Uniform Transfers to Minors Act The bank typically freezes activity on the birthday until the new adult beneficiary provides instructions—keep the account, transfer it, or close it out.