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How to open a bank account for children
A guide to age limits and other requirements for kids' bank accounts.
Minors can’t open a bank account without a parent or guardian who is at least 18 year old listed as a joint owner on the account. The specific steps may vary slightly depending on the financial institution, but you can generally open a bank account for children using these seven steps.
1. Decide on the account type
Plenty of banks offer checking and savings accounts for kids, but age restrictions vary. For instance, kids checking accounts are generally only available to teenagers, while savings accounts are typically an option for children of any age. In fact, there are even savings accounts for babies.
A popular alternative to checking accounts are prepaid debit cards for kids. These cards are increasingly common, and many of them include apps that offer a variety of parental controls, including the ability to assign chores and disburse allowance payments. Some of these apps also include financial literacy features to help your kid learn to manage money.
If you don’t want your young one to have direct access to cash, you can open a custodial account for kids, which prevents your child from accessing deposited funds until they turn 18 or 21, depending on your state. These accounts are commonly used to pay for college, a car or a down payment on a home.
2. Research your options thoroughly
Once you’ve identified the type of account you want for your kid, it’s time to start comparing your options. There are hundreds of kid-centric accounts to choose from, and identifying the right one can be a challenge. Determine what aspects of an account are more important to you, then start researching banks, credit unions and fintech companies that may meet your needs. If you’re not sure where to start, compare interest rates, fees and other features, such as branch locations and ATM networks.
But don’t just read the surface-level marketing information you come across during your research. Dig into the terms of service and schedule of fees for any account that piques your interest. And always check popular review websites, such as Trustpilot and the Better Business Bureau (BBB), to find out what actual account holders have to say.
3. Prepare to apply
When you’re ready to apply, gather your financial documents ahead of time to make the process easier. You’ll typically need your driver’s license and Social Security number, though other identifying documents may also be required depending on the bank or credit union. For instance, you may need your child’s birth certificate or their school ID for student bank accounts. If you’re unsure as to exactly what you’ll need, contact a support representative before beginning the application process.
4. Complete the application
After you’ve narrowed down your options and decided on the best account for your child and parenting style, it’s time to apply for an account. Many traditional brick-and-mortar banks require you to visit a local branch with your child to open an account, but plenty of modern banking providers let you apply online or over the phone. In either case, the application process should only take about 10 minutes
5. Fund the account
In many cases, you’ll need to fund the account during the final stage of the application process. Usually, you can deposit funds into your kid’s account with any debit card, credit card or existing bank account, but some institutions are more strict. For example, Navy Federal Credit Union only lets you fund its Visa Buxx prepaid card for teens with a valid Navy Federal Visa card or Mastercard.
6. Activate your kid’s card
Once the application process is complete, you may receive a debit card or bank card your kid can use to make purchases or access funds at an ATM. This card will usually arrive in the mail seven to 10 days after your application is approved, but some banks and credit unions may issue a temporary card immediately. Regardless of when you get your kid’s card, you need to activate it online or by calling a toll-free number. If your kid has a smartphone, they may also be able to add the card to a digital wallet, such as Apple Pay if your kid is 13+ or Google Pay if your kid is 16+.
7. Install the app
Many bank accounts for kids come with accompanying mobile apps that your child can use to check their balance and you can use to monitor account activity or restrict access to funds. Several of today’s most popular apps, including Greenlight and BusyKid, let parents assign chores and pay allowance with just a few taps.
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 kids 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, USAlliance Financial’s MyLife Savings for Kids account is designed for children under the age of 12, while the Alliant Credit Union Free Teen Checking account is designed for kids age 13 to 17.
7 things to consider before opening a bank account for your kid
Keep these factors in mind when looking for the a bank account for your child.
- Age account changes. Many banks convert kids’ accounts to standard accounts once the child turns 18, and these adult accounts often have monthly fees. Some banks let your child keep the account until they’re well into their 20s.
- Earns interest. Most kids savings accounts earn a negligible amount of interest, but a few earn competitive APYs. Some kids checking accounts also earn interest, but those are relatively rare.
- Financial literacy features. Most checking and savings accounts for kids don’t offer financial literacy options. If you’re after an account that teaches your kid how to manage money, look at prepaid debit cards for kids.
- Age requirements. Many savings accounts and prepaid debit cards are open to children of any age, but checking accounts are often available to teens.
- Monthly fees. Most savings accounts for kids are free to open and maintain, but checking accounts and debit cards commonly have recurring fees. Most of the time, these fees are listed front and center, but in some cases they aren’t obvious.
- Debit card. Depending on the account type, your child may be eligible to receive a debit card or ATM card they can use to spend or access funds in the account.
- Balance requirements. Kids’ checking accounts may require a minimum balance to keep the account open or avoid monthly charges. Some savings accounts have a similar requirement, but most do not.
Can I open a kids 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 and your child’s identities.
Compare popular online bank accounts for kids
Compare these popular online accounts for kids that let them save, spend and learn how to manage their money.
Can parents withdraw money from their child’s bank account?
Even though a kids 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 kids 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 | 10% |
| $2,601 – $9,300 | 24% |
| $9,301 – $12,750 | 35% |
| $12,751 + | 37% |
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.
What is a kid’s bank account?
A kid’s bank account works pretty much the same as 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.
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. To find the best fit for you, compare children’s bank accounts.
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