How to Open a Savings Account for a Minor

Teaching children to save is an important lesson. While this can be done with a simple piggy bank, adults may wish to show minors how banks work and what benefits they provide. Opening a savings account for your child or teenager at a financial institution will teach him valuable skills, such as how to keep a record of transactions, how to calculate interest and how to complete a deposit slip. Typically with accounts for minors, an adult, who is the custodian of the funds, is required to appear on the account. In the bank's eyes, the funds in the account belong to the minor, but decisions about the account's management are made by the custodian.

Difficulty: Easy

Instructions

Things You'll Need:

• Identification documents

1. Decide which bank you want to do business with. Contact convenient locations by phone or visit their websites. Compare the minimum balance requirements, monthly service charges and rates of interest on savings accounts at different banks to find the best deal. Whether a bank offers online access and whether you already bank there may be other factors in choosing a bank.

2. If the child is old enough to understand, discuss your upcoming trip to the bank. Explain why you are opening a savings account and what will happen when you get there.

3. Gather the required initial deposit, as well as the information and documents needed for opening the account. At a minimum, the bank will require name, address, date of birth, phone number, and social security number for both you (the custodian) and the minor. Additionally, the bank may wish to see your child's birth certificate and social security card, as well as a state or government issued photo id (such as a driver's license) for you.

4. Visit the bank and meet with an accounts officer or client services representative to open the account. Ask the person who opens the account to explain the savings book and the deposit slips to the minor if she is old enough to understand.

5. Sign the signature cards for the account, and have your child sign as well, if he is old enough to do so.

6. Before leaving the bank, show your child where deposits are made in the branch. If the branch is not busy, introduce your child to one of the tellers.

7. Return home and read the account documents. Explain any additional information to your child. If anything is unclear or incorrect, contact the person who opened the account.

8. Make a plan with you child for the next visit to the bank. Encourage her to save her loose change or a portion of her allowance in the meantime.

9. Review the first statement with your child when it arrives in the mail, showing him how to read it and pointing out to him how much interest his money earned. Explain the importance of examining the bank statement every month to check for unauthorized activity.

Tips & Warnings

• Check with the bank ahead of time to verify what forms of identification are needed to open an account. Teaching your child how to look at his account online can also be a beneficial lesson. As the account balance grows, consider opening a certificate of deposit for your child so that she can learn about another type of savings product and earn a higher rate of interest.
• Savings accounts that earn more than $10 of interest each year will be reported to the IRS and may require income tax filing. Consult with an accountant or tax professional for more information.

Resources

• FDIC site that includes bank locator

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