Opening a Bank Account as a Minor

Quick answer

• Minors typically need a parent or guardian to open a joint account.
• Some banks offer specialized youth or student accounts with fewer fees.
• You’ll need identification for both the minor and the adult co-signer.
• Understand the account’s features, like online access and debit card usage.
• Discuss financial goals and responsibilities with your child before opening.
• Be aware of any withdrawal limits or transaction restrictions.

Who this is for

• Teenagers under 18 looking to manage their own money.
• Parents or guardians who want to teach their children about financial responsibility.
• Young adults preparing to transition to independent banking in the near future.

What to check first (before you act)

Your Goal and Timeline

What do you want this bank account to achieve? Is it for saving allowance, earning interest, or learning to manage spending? Your timeline will influence the type of account you choose. For example, a short-term goal might not require a high-yield savings account, while a long-term goal for a car or college might.

Current Cash Flow

Understand how money is coming in and going out. For a minor, this might be allowance, gift money, or earnings from a part-time job. For the parent or guardian, it’s important to assess your own financial situation to ensure you can comfortably co-sign and monitor the account.

Emergency Fund or Safety Buffer

While a minor’s account might not have a large emergency fund, it’s a good concept to introduce. Ensure there’s enough in the account to cover any potential fees or small, unexpected needs without going into overdraft. For the adult co-signer, maintaining your own robust emergency fund is crucial.

Debt and Interest Rates

For a minor, this typically refers to understanding the concept of debt, like overdraft fees, rather than carrying debt. For the adult, review any outstanding debts and their interest rates to ensure they don’t impact your ability to co-sign or manage the account responsibly.

Credit Impact

Opening a joint account means the adult co-signer’s credit history is linked. Understand that responsible management of the minor’s account can positively reflect on the co-signer, but mismanagement, like overdrafts, could negatively impact their credit.

Step-by-step (simple workflow)

1. Discuss Financial Goals:

• What to do: Sit down with your child and talk about why they want a bank account. Discuss saving for specific items, learning to budget, or simply having a safe place for their money.
• What “good” looks like: Clear understanding from the minor about the purpose of the account and agreement on shared financial goals.
• Common mistake and how to avoid it: Not having this conversation, leading to the minor not understanding the account’s purpose or their responsibilities. Avoid this by making it a dedicated discussion.

2. Research Banks and Account Types:

• What to do: Look for banks that offer accounts specifically for minors or students. Compare features like minimum balance requirements, monthly fees, ATM access, and online/mobile banking capabilities.
• What “good” looks like: Finding an account that aligns with your child’s likely usage and your family’s financial habits, ideally with low or no fees.
• Common mistake and how to avoid it: Choosing the first bank you see without comparing options. Avoid this by spending time researching at least 2-3 different institutions.

3. Gather Required Documents:

• What to do: Collect identification for both the minor and the parent/guardian. This typically includes a Social Security number, birth certificate (for the minor), and a driver’s license or state ID (for the adult). Check the bank’s specific requirements.
• What “good” looks like: Having all necessary documents readily available to streamline the application process.
• Common mistake and how to avoid it: Showing up to the bank without all required documents, leading to a wasted trip. Avoid this by calling the bank ahead of time or checking their website for a complete list.

4. Choose Account Type (Joint vs. Custodial):

• What to do: Understand the difference. A joint account means both the minor and adult have equal access and ownership. A custodial account (like UTMA/UGMA) means the adult manages the money for the minor’s benefit until they reach the age of majority. Most minor accounts are joint.
• What “good” looks like: Selecting the account structure that best fits your comfort level with control and your child’s maturity.
• Common mistake and how to avoid it: Not understanding the ownership and access implications. Avoid this by asking the bank representative to clearly explain the differences.

5. Visit the Bank or Apply Online:

• What to do: Go to a local branch with your child and the required documents, or follow the bank’s online application process.
• What “good” looks like: Completing the application smoothly and opening the account.
• Common mistake and how to avoid it: Rushing the application or not reading the terms and conditions carefully. Avoid this by taking your time and asking questions.

6. Fund the Account:

• What to do: Make an initial deposit. This can be cash, a check, or a transfer from another account.
• What “good” looks like: The account is active and has a starting balance.
• Common mistake and how to avoid it: Forgetting to make the initial deposit, leaving the account in limbo. Avoid this by making the deposit immediately after opening.

7. Set Up Online Access and Debit Card:

• What to do: If available, help your child set up online banking access. Request a debit card if it’s part of the account features.
• What “good” looks like: The minor can track their balance and transactions online, and has a card for spending if appropriate.
• Common mistake and how to avoid it: Not setting up online access, limiting the learning opportunity. Avoid this by prioritizing this step.

8. Establish Rules and Expectations:

• What to do: Discuss how the debit card will be used, withdrawal limits, and what to do if the card is lost or stolen. Set clear expectations for spending and saving.
• What “good” looks like: A shared understanding of responsible card usage and account management.
• Common mistake and how to avoid it: Assuming the minor will figure it out. Avoid this by having a detailed conversation about the rules.

9. Regular Check-ins and Education:

• What to do: Periodically review account statements together. Discuss transactions, savings progress, and any fees incurred. Use this as a teaching moment.
• What “good” looks like: The minor is engaged in managing their money and learning from their activity.
• Common mistake and how to avoid it: Opening the account and then completely forgetting about it. Avoid this by scheduling regular, brief check-ins.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not discussing goals and responsibilities	Minor doesn’t understand account purpose; potential for misuse or mismanagement.	Have a clear conversation about financial goals and how the account will be used.
Choosing the wrong account type	Unnecessary fees, lack of needed features, or too much/little control.	Research youth/student accounts and compare features before deciding.
Forgetting required documentation	Delays in opening the account, frustration, wasted trips.	Verify required documents with the bank before visiting or applying online.
Not understanding joint vs. custodial	Adult co-signer may have more or less control than intended.	Ask bank staff to clearly explain the ownership and access rights for each account type.
Overdrafting the account	Incurring significant fees, potentially impacting the adult co-signer’s credit.	Set up low balance alerts and teach the minor to track their balance before spending.
Misplacing debit card or PIN	Potential for unauthorized use, inconvenience, and security risks.	Teach the minor to keep their card and PIN secure and to report loss immediately.
Ignoring account statements	Missing fraudulent activity, not understanding fees, missed learning opportunities.	Schedule regular times to review statements together and discuss transactions.
Not setting spending/saving limits	Excessive spending, failure to meet savings goals, potential for debt (fees).	Agree on clear spending limits and savings targets for different purposes.
Not teaching about fees	Minor may not understand why their balance decreases unexpectedly.	Explain common bank fees (e.g., monthly maintenance, ATM, overdraft) and how to avoid them.
Assuming the minor is solely responsible	Lack of adult oversight can lead to poor financial habits forming.	Maintain active involvement and provide guidance as the minor gains experience.

Decision rules (simple if/then)

• If your child receives regular allowance or earns money from chores/a job, then opening a bank account is a good idea because it teaches money management.
• If your child is under 13, then a joint account with a parent or guardian is almost always required because banks have specific rules for very young accountholders.
• If you are concerned about your child overspending, then choose an account with no overdraft feature and set a low balance alert because this prevents accumulating fees.
• If your child has a specific savings goal (e.g., for a bike or college), then consider an account with a slightly higher interest rate if available because it can help their savings grow faster.
• If your child is 16 or 17 and has a part-time job, then you might explore accounts that offer more independence, like a student checking account with a debit card, because they are preparing for adulthood.
• If you want to maintain full control until your child reaches adulthood, then a custodial account (UTMA/UGMA) might be considered, but understand the legal implications and that the funds legally belong to the minor.
• If you are looking for the lowest fees, then compare credit unions and online banks because they often have lower overhead costs.
• If your child frequently loses things, then consider delaying the issuance of a debit card and focus on deposit-only features first because it reduces the risk of unauthorized use.
• If the bank offers financial literacy resources for young people, then take advantage of them because they can supplement your own teaching efforts.
• If you see unexpected fees on the statement, then review the account agreement with your child because it’s a crucial learning moment about understanding financial terms.

FAQ

Can a minor open a bank account by themselves?

Generally, no. Most banks require a parent or legal guardian to be a co-signer on an account for anyone under 18. This is often structured as a joint account.

What identification is needed to open a bank account for a minor?

You’ll typically need proof of identity and address for the adult co-signer (like a driver’s license and utility bill) and identification for the minor, such as a Social Security card and birth certificate. Check with the specific bank for their exact requirements.

What’s the difference between a joint account and a custodial account for a minor?

In a joint account, both the adult and the minor have ownership and access rights. In a custodial account (like UTMA/UGMA), the adult manages the funds for the minor’s benefit, but the money legally belongs to the minor and they gain full control at the age of majority (usually 18 or 21, depending on the state).

Are there special bank accounts for teenagers?

Yes, many banks offer “youth” or “student” accounts designed for minors. These accounts often have features like no monthly fees, lower minimum balance requirements, and sometimes offer debit cards with spending limits.

What happens if a minor overdraws their account?

If the account is joint, the adult co-signer is typically responsible for covering the overdraft and any associated fees. Some accounts may have features to prevent overdrafts or limit the fees.

Can a minor have a debit card?

Yes, many youth or student accounts come with a debit card. However, parents or guardians can often set spending limits or choose to not issue a card initially, depending on the child’s maturity and the bank’s policies.

How much money do I need to open a bank account for a minor?

This varies by bank. Some accounts have no minimum opening deposit, while others may require a small amount, such as $25 or $50. It’s best to check with the specific bank.

What this page does NOT cover (and where to go next)

• Detailed comparisons of specific bank products and their current interest rates.
• The legal intricacies of custodial accounts (UTMA/UGMA) in every state.
• Advanced investment strategies for minors (e.g., custodial brokerage accounts).
• Specific tax implications for interest earned on minor accounts.
• Guidance on choosing a financial advisor for a minor’s long-term financial planning.