It’s never too early for kids to start developing smart financial habits. Opening a bank account with your child can be a fun way to help them learn the ins and outs of saving and spending money at a young age. Whether your child knows it or not, having a bank account will be a big part of their life down the line. Why not start teaching them how to make responsible financial decisions now?
Keep reading to learn all about how to open a bank account for a minor.
Why open a bank account for a minor?
Opening a bank account with a minor has many benefits. It can be a great way for your child to build their financial literacy and confidence from a young age. Learning how banks work, creating savings goals and watching their money earn interest can help them develop money management skills. Depositing small allowance payments once per week can start conversations about how much they need to save up for a special item and eventually building savings for a rainy day.
If your child is slightly older pre-teen or teen, that’s even more of a reason to get them involved. Opening a bank account together can create opportunities for important discussions about money – do they want to save for their first car? How will they budget for needs and wants?
Types of bank accounts available for minors
There are 2 common types of bank accounts available for minors: custodial and joint.
- A custodial account is owned by the child but managed by an adult until the child reaches the set maximum age, which can vary state by state. Custodial accounts are usually savings accounts but can also be checking accounts or certificates of deposit.
- A joint account is co-owned and managed by the adult and the child. Joint accounts can allow a parent to set rules and limitations on account usage, and your child can be eligible for their own account when they turn 18. Joint accounts can be savings or checking accounts.
Documents and information for opening a bank account
Whether you’re opening an account in person or online, you will likely need certain documentation and information. Have your government-issued ID as well as identification for the minor (a passport or student ID may work). Be ready with your birth dates, contact information (address, phone number, email) and full legal names.
Step-by-step guide to opening a bank account for a minor
There are a few general steps to opening a bank account with your child. While it may be easier to open an account online, it may be more instructive to take your child to a local bank branch with you. Here’s how to set up a bank account in person:
- Step 1: Research where you want to open an account with your child. It can be helpful and convenient to have the account at the same bank you use. Depending on the bank, you may need to make an appointment to open an account.
- Step 2: Gather the necessary documentation and head to the bank with your child. Typically, someone at the bank will review your documentation and help you set up the account.
- Step 3: Depending on the type of account, you may be asked to set specifics like withdrawal limits or spending parameters.
- Step 4: Make your initial deposit
Tips for parents on managing a minor's bank account
There are many ways you can go about managing your child’s bank account. It really comes down to what works best for you and your child, and what you want them to get out of the experience. Setting aside time to review and discuss account activity together is a great way to boost their financial literacy, model good financial habits and spend valuable time together.
Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.
