Children can open a savings account in a bank. As a child, you are entitled to have a Uniform Transfers to Minors Act (UTMA) account as governed by law. An important aspect of the Law in your State is the age limit of minors. A responsible adult, not necessarily the parent or guardian, must be the custodian for the account. At time of opening the account, the child must have a social security number. The adult custodian must have a valid identification card and access to the following information about the child:
- Date of birth
- Social security number
- Home address
- Phone number
The typical minimum opening deposit is $25 and there are usually no service fees. The savings account offers an interest rate that varies according to conditions in the Economy. Only the custodian can make withdrawals from the account UNLESS the child is at least 13 years of age and is a joint signer of the account.
The bank submits any necessary tax forms to the Internal Revenue Service (IRS). The child’s tax responsibility is negligible when the savings account has a small balance. Further information about the child’s or custodian’s tax responsibility can be discussed with the bank officer at time of opening the account.
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