Open a Youth Bank Account

Opening a kids bank accounts is essential in teaching financial responsibility and setting them up for success. 

Keep reading to learn everything you need to know about the types of minor banking accounts available and the features they provide, so you can ensure your child has access to all the tools they need to learn about successful money management. We’ll also discuss common questions about minors having bank accounts, so you can feel confident you have everything covered.

Types of Accounts

Knowing what type of account to open for your child can feel overwhelming at first, but it doesn’t have to be. Here are some types of accounts that may work best for you and your family:

Savings accounts for minor children are one of the most common types of bank accounts parents open for their children. These allow children to deposit money that will earn interest over time. One benefit to traditional savings accounts is that money can be withdrawn without penalty or fees.  

Checking accounts offer more flexibility than savings accounts as they provide access to debit cards and online banking services like bill pay and transfers between other banks or credit unions. With this type of account, parents can set up allowances or deposits from their own checking/savings accounts, so children learn how to manage money regularly with real-world experience rather than just in theory.

Custodial accounts are typically opened by parents on behalf of minors. These types of bank accounts give parents control over a child’s finances until adulthood. Then, once they turn 18 years old, all control is transferred back into the hands of the adult child unless otherwise specified by law or contract agreement with the custodian (parent). 

Custodial bank accounts often come with higher interest rates than standard savings/checking options due to their long-term nature. This might make them an excellent choice for families hoping to save for college tuition or future investments like stocks/bonds, etc.

Debit cards come in two varieties – prepaid and regular – and offer different benefits depending on your needs. Choosing the right debit card for your teen depends on your needs. Prepaid debit cards are generally used as budgeting tools since there’s no overdraft protection associated with them. Regular debit cards link directly to an existing checking/savings balance and allow your child to access funds until the total balance is depleted.

A ROTH IRA (Individual Retirement Account) allows individuals under the age of 18 who’ve earned income through employment the opportunity to save for their future. The max yearly contribution can’t be more than what the child earned, and contribution limits are $6500 per year, as of 2023. 

Youth Certificates (CDs) are another option to consider if you want to invest more significant sums of money for a longer period – generally anywhere from 1-5 year terms. There’s typically a minimum deposit amount required, and returns are earned with a fixed interest rate.

What You Need

Before you open a child’s bank account, there are certain documents you need to have ready.


If you’re looking for guidance on how to open a bank account for a minor, note that you need the following: 

  • Name: You’ll need your child’s full name as listed on their birth certificate or another legal document like a passport or driver’s license.

  • Proof of address: This could include a utility bill, lease agreement, or any other official document with your address on it.

  • Date of birth (DOB): Your child’s date of birth should match what’s listed on their birth certificate or other legal documents.

  • Birth certificate: In most cases, a copy of the original birth certificate must be provided when opening an account for children under 18 years old.

  • Parent’s valid ID: The parent/guardian who opens the account will need to provide a valid, government-issued photo ID (like a driver’s license, state-issued ID card, military ID card, etc.), so make sure you have this handy before heading to the bank or credit union.

  • Social Security Number (SSN): In some cases, providing your child’s SSN may be required when opening an account; however, this can vary by financial institution, so you can check with them first.

Having all these documents ready will make setting up your kid’s bank accounts much smoother and faster.  

Features You Want in an Account

Certain kid’s bank account features will help your child learn the importance of saving and budgeting.

  • Mobile app – Access to a mobile app is a must for any kid’s bank account. With this feature, your child can quickly check their balance and track spending habits from anywhere with just a few clicks on their phone or tablet. This makes it easier for them to keep up with their finances and learn to budget responsibly.

  • Checking or savings account options – Depending on what kind of savings goals you or your child have, you may want to look into different types of accounts (such as checking vs savings). Checking accounts might offer more flexibility regarding withdrawals and deposits, while savings accounts typically come with higher interest rates that can be beneficial if the goal is to build long-term wealth over time.

  • Low or no fees – Any kids’ bank account should have low fees so kids aren’t penalized for making mistakes while learning how banking works. Try to find a credit union offering no monthly maintenance fees, no minimum balance requirements, and free ATM transactions.

  • Parental controls on debit cards – If you decide that giving your child access to a debit card is appropriate, make sure the bank offers parental controls so you can monitor where money is being spent and limit purchases if necessary. This way, you won’t have to worry about your child getting into financial trouble by overspending.

  • Interest – Lastly, but importantly, you might want to consider a kid’s bank account that pays some interest. Even though it might not seem like much initially, every bit counts. The sooner kids understand the concept of earning interest, the better!

FAQs About a Minor Banking Account

Are there taxes on a bank account for kids?

Children can be taxed on their earnings in a savings account, just as adults can. That said, how much they’ve earned in a year will determine whether (and how much) they’ll pay in taxes. As of 2023, parents can legally claim a child’s earnings on their return as long as it was less than $11,000 in income. 

What are the gifting limits for youth bank accounts?

In 2022, parents could gift a child up to $16,000 each without triggering any gift tax requirements. In 2023, that limit is increasing to $17,000. 

How old does a kid need to be to have an account?

Most banks require that minors be at least 13 years old before opening a checking or savings account in their name alone. Some banks allow parents to open joint accounts for children under 13, but this can differ by institution, so check with your local branch first.

What’s the best account for a kid to save money?

When choosing an account for kids, look for one that offers low fees and high-interest rates, such as online savings accounts or certificates. Additionally, some banks offer special programs specifically designed to teach kids financial literacy skills while they earn rewards like gift cards or freebies when specific goals are met. Be sure to ask your financial institution about these types of accounts.

Open a child’s bank account with Island Federal today. With our convenient, secure online banking platform and friendly customer service representatives, you can trust us to help your kids learn the importance of financial literacy. Plus, we’ll give them exclusive benefits like rewards programs and special savings offers. Don’t wait any longer – join Island Federal now for the best in kid-friendly banking solutions!