Who can open an account and what you need to know

You cannot open a bank account in your godchild's name alone. A parent or legal guardian must be the account owner. What you can do is help a parent or guardian open a custodial account — a savings or checking account held in the child's name but controlled by an adult until the child reaches the age of majority (usually 18 or 21, depending on your state and the bank).

If you want to give money to your godchild or help them build savings, you have three realistic paths: open a custodial account together with a parent or guardian, give money to a parent to deposit into an existing account, or set up a trust or investment account in your own name with instructions for what happens to it later. The first option is the most straightforward and keeps the money directly connected to your godchild.

Key Takeaways

  • A parent or legal guardian must open and own the account; you cannot open one in your godchild's name without them.
  • Custodial accounts let you deposit money that belongs to your godchild while a parent or guardian controls it until the child turns 18 or 21.
  • You will need the child's Social Security number, proof of identity for the parent or guardian, and proof of address to open a custodial account.
  • Most banks allow you to add a second adult (like a godparent) as a co-custodian, but this requires the parent's or guardian's permission and signature.
  • Money in a custodial account belongs to the child and may affect their financial aid may be able to access later, so discuss this with the parent before depositing large amounts.

How custodial accounts work

A custodial account is opened in your godchild's name with a parent or guardian as the custodian — the adult who controls the account and makes decisions about the money. You can deposit money into the account, but you cannot withdraw it without the custodian's permission. The child's name appears on the account, and the money is legally theirs, but they cannot access it or make decisions about it until they reach the age set by your state's law (usually 18 for checking accounts, 21 for investment accounts).

When the child turns 18 or 21, the account transfers to their control automatically. At that point, the custodian's authority ends. This is why it matters which parent or guardian you choose to work with — they will be the one making decisions about the money for years, and you should trust their judgment.

Some banks allow you to name a second custodian or co-custodian, such as yourself. This means either you or the parent can make decisions about the account. However, the parent must agree to this and sign the paperwork. You cannot add yourself as a co-custodian without their knowledge or consent.

What documents and information you need

To open a custodial account, the bank will ask for the child's Social Security number, the parent's or guardian's government-issued ID (driver's license or passport), and proof of the parent's address (a recent utility bill, lease, or bank statement). Some banks also ask for the child's birth certificate, though this is less common.

If you are opening the account together with the parent, bring your own ID as well. If you want to be named as a co-custodian, bring your ID and be prepared to sign additional paperwork. The parent or guardian must be present or must authorize the account opening in writing — you cannot open it on their behalf without explicit permission.

Different banks have different requirements, so call ahead or check the bank's website before you go. Some banks have minimum deposit amounts for custodial accounts, and some charge monthly fees. Ask about these details when you call.

Types of custodial accounts available

Most banks offer custodial checking accounts and custodial savings accounts. A checking account lets the child (or the custodian on their behalf) write checks or use a debit card once they are old enough. A savings account earns interest and is meant for money you want to keep and grow. Some banks offer both in one package.

You may also hear about UTMA accounts (Uniform Transfers to Minors Act) and UGMA accounts (Uniform Gifts to Minors Act). These are custodial investment accounts that hold stocks, bonds, or mutual funds instead of just cash. They work the same way — a parent or guardian controls the account until the child reaches the age set by your state — but they are designed for longer-term growth. Not all banks offer these, and they often require a higher minimum deposit.

If you are thinking about large gifts or long-term savings, ask the parent whether a UTMA or UGMA account makes sense. These accounts have tax advantages for smaller amounts, but they can affect the child's financial aid may be able to access in college, so discuss this with the parent before opening one.

Tax and financial aid considerations

Money in a custodial account belongs to your godchild, not to you. This matters for taxes and for financial aid. If the account earns interest or investment income, that income is taxed at the child's tax rate, which is usually lower than an adult's. However, the parent or guardian may need to file a tax return for the child if the income exceeds a certain threshold (this threshold changes each year, so ask the bank or a tax professional for the current number).

Custodial accounts also count as the child's assets when they or their parents apply for college financial aid. Money in the child's name reduces their financial aid may be able to access more than money in a parent's name does. If you are planning to deposit a large amount, talk to the parent first. They may prefer that you give them the money to hold in their own account, or they may decide that a custodial account is still the right choice.

What happens when your godchild turns 18 or 21

When your godchild reaches the age of majority in your state (usually 18 for checking, 21 for investment accounts), the custodian's control ends automatically. The account becomes theirs to manage. They can withdraw the money, spend it, invest it, or leave it alone. You and the parent have no say in what happens next.

This is why it is important to talk to the parent about the purpose of the account before you open it. If you want the money to be used for college or a specific goal, make that clear to the parent now — but understand that once the child takes control, they can use it for anything. The law does not require them to use it the way you intended.

Some godparents choose to have a conversation with their godchild before they turn 18, explaining what the account is for and why it matters. This is not legally required, but it can help the child understand the gift and make thoughtful decisions about it later.

Alternatives if the parent will not open an account

If the parent or guardian is unwilling or unable to open a custodial account, you have other options. You can open a savings account in your own name and tell the parent that the money is intended for your godchild. You can also set up a trust with a lawyer, naming your godchild as the beneficiary and specifying when and how they receive the money. A trust costs more upfront but gives you more control over how the money is used.

You can also simply give money to the parent to deposit into an account they already control. This is the simplest option if you are making smaller, occasional gifts. The parent can keep track of how much is yours and make sure it is used for your godchild's benefit.

If you are considering a large gift or a long-term savings plan, talk to a lawyer or financial advisor about what makes sense for your situation. They can help you understand the tax and legal implications of each option.

Frequently Asked Questions

Can I open a custodial account if I am not related to the child?

Yes. The bank does not require you to be a relative. However, the parent or legal guardian must open the account and must be present or must authorize it in writing. You can help with the process and contribute money, but the parent must be the custodian or co-custodian.

What if the parent and I disagree about how the money should be used?

The custodian (the parent or guardian) has the legal right to make decisions about the account. If you are a co-custodian, you have equal say, but the parent can remove you as co-custodian. If you are not a custodian, you have no legal control. This is why it is important to talk to the parent and agree on the account's purpose before you open it.

Can I set up a custodial account online?

Some banks allow you to open a custodial account online, but most require at least one person to visit a branch or to verify identity by video. Call your bank to ask whether they offer online opening for custodial accounts and what documents you will need to provide.

Will money in a custodial account affect my godchild's ability to get student loans?

Custodial accounts count as the child's assets on financial aid forms, which can reduce their may be able to access for need-based aid. However, they do not affect may be able to access for federal student loans based on credit or income. Talk to the parent about this before depositing large amounts, especially if college is coming up soon.

What if the custodian dies before my godchild turns 18?

The account does not automatically close. However, the bank will need to know about the death and may require a new custodian to be named. This depends on the bank's rules and your state's law. Talk to the parent about what should happen in this situation, and consider naming a backup custodian when you open the account if the bank allows it.