You can open a savings account for a minor, but not for an adult without their presence or permission
The rules depend entirely on who you are opening the account for. If the person is a minor, you can open a custodial account (also called a guardianship account) in your name as the custodian, with the child's Social Security number on file. The child does not need to be present, and you control the account until they reach the age of majority—usually 18 or 21, depending on your state and the account type.
If you are trying to open an account for an adult, the bank will not allow it. That adult must be present in person, or in some cases online, to sign documents and verify their identity. Banks are required by federal law to confirm the identity of the account holder themselves. You cannot open an account in someone else's name without their direct participation, even if you have power of attorney.
The exception is a power of attorney arrangement, where an adult has already given you legal authority to act on their behalf. Even then, most banks require the account holder to be present for the initial opening, though you may be able to manage it afterward.
Key Takeaways
- Custodial accounts let you open a savings account for a minor using their Social Security number, and you control the money until they reach adulthood.
- For an adult, the person must be present in person or complete an online verification process themselves—you cannot open an account for them without their participation.
- You will need the minor's Social Security number, birth certificate, and proof of your relationship (custody papers, birth certificate showing you as parent, or court order).
- The bank will ask what type of custodial account you want: UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gifts to Minors Act), which have different rules about when the child takes control.
- If the adult has given you power of attorney, bring that document to the bank, but expect the account holder to still need to verify their identity themselves.
Opening a custodial account for a minor
A custodial account is a savings or investment account held in your name as custodian for a child. You contribute the money, manage it, and make decisions about how it grows. The child's name and Social Security number appear on the account, but they have no control over it until they reach the age of majority in your state.
To open one, bring the child's Social Security number, your government-issued ID, and proof of your relationship to the child. Proof of relationship can be a birth certificate showing you as the parent, adoption papers, guardianship court order, or in some cases a notarized statement of guardianship. Call the bank ahead to ask what they accept, because requirements vary.
The bank will ask whether you want a UTMA account (Uniform Transfers to Minors Act) or a UGMA account (Uniform Gifts to Minors Act). The difference matters: UTMA accounts can hold real estate, patents, and other property beyond just money and securities, while UGMA accounts are limited to gifts of money and securities. In most states, the child takes control of a UTMA account at 18 or 21 (your state sets this), while UGMA control transfers at 21. Ask the bank which is standard in your state and which makes sense for what you are saving.
What documents you need for a custodial account
| Document | Why the bank needs it | Notes |
|---|---|---|
| Child's Social Security number | Required for tax reporting and account identification | The account earns interest, which is taxable income to the child |
| Your government-issued ID | Verifies your identity as the custodian | Driver's license, passport, or state ID |
| Proof of relationship | Confirms you have the right to open an account for this child | Birth certificate, adoption papers, or guardianship order; call ahead to confirm what the bank accepts |
| Child's birth certificate (sometimes) | Some banks use this to verify the child's identity and age | Not always required; ask when you call |
Bring originals or certified copies. Some banks accept photocopies, but certified copies are safer. If you do not have a birth certificate, a guardianship court order or adoption papers will work in most cases.
Opening an account for an adult with power of attorney
If an adult has given you a durable power of attorney document, you have legal authority to act on their behalf in financial matters. However, most banks still require the account holder to be present for the initial opening and identity verification. Federal anti-money-laundering rules require the bank to confirm the identity of the person whose name is on the account.
Bring the power of attorney document, your ID, and the account holder's ID if they are present. If they cannot be present, ask the bank whether they offer remote identity verification—some banks can verify the account holder's identity through a video call or by sending them a secure link to complete online. This varies by bank and by state.
Once the account is open, you can typically manage it using the power of attorney: deposit money, withdraw funds, and handle routine transactions. The account holder remains the legal owner, and you are acting as their agent. If the power of attorney expires or is revoked, your authority ends immediately.
Tax reporting for custodial accounts
Interest earned in a custodial account is taxable income to the child, not to you. The bank will send a 1099-INT form (or 1099-OID for certain investments) to the child's Social Security number each year. The child or their parent must report this on a tax return, even if the child does not normally file taxes.
The first $1,250 of unearned income (as of 2024, though this amount changes yearly) is typically not taxable to a dependent child. Income above that is taxed at the child's rate, which is usually lower than an adult's rate. If the child has more than $1,250 in interest or investment gains, consult a tax professional about whether a return is required and how to file it.
Keep records of all deposits and withdrawals. When the child reaches adulthood and takes control of the account, they will need to know the account history for their own records and for any future tax questions.
What happens when the child reaches adulthood
On the date your state sets (usually 18 or 21), the custodial account automatically transfers to the child's control. You lose the right to manage it, withdraw from it, or make decisions about it. The child becomes the sole owner and can do whatever they want with the money.
Some banks send a notice before this happens; others do not. Mark the date on your calendar and contact the bank a few months before to ask what paperwork is needed. The child may need to sign new documents or visit the bank in person to take over the account. If the child is away at college or living elsewhere, ask whether this can be done online or by mail.
If you want to keep some control over the money after the child reaches adulthood, you would need to set up a different arrangement—such as a trust—before the custodial account matures. A lawyer can advise on whether this makes sense for your situation.
Frequently Asked Questions
Can I open a savings account for my grandchild if I am not the legal guardian?
Yes. You do not need to be the legal guardian to open a custodial account. You need proof of your relationship to the child—a birth certificate showing you as grandparent, or a notarized statement. Call the bank first to ask what they accept, because policies vary.
What if the child's other parent objects to the account?
A custodial account is opened in your name as custodian, so you have the legal right to open it. However, if there is a custody dispute or court order limiting one parent's authority, the bank may ask to see the custody paperwork. If you are unsure whether you have the right to open the account, consult a family law attorney before going to the bank.
Can I add money to someone else's existing savings account without opening a new one?
Only if you are already listed as a joint owner or authorized user on that account. Otherwise, you would need to transfer money to the account holder, and they would deposit it themselves. Ask the bank whether you can be added as an authorized user if you want ongoing access.
Do I need the child's permission to open a custodial account?
No. The child does not need to sign anything or give permission. You as the custodian have the legal right to open the account and manage it until they reach adulthood. However, it is good practice to tell the child about the account as they grow older, so they understand what you are saving for them.
What happens if I die before the child reaches adulthood?
The custodial account becomes part of your estate. Your will or the laws of your state determine who takes over as custodian. If you do not name a successor custodian in your will, a court may need to appoint one. Consider naming a successor custodian when you open the account, or update your will to specify who should manage the account if you pass away.