A minor cannot open a high-yield savings account alone, but can open one with a parent or guardian as a joint account holder
Banks and online financial institutions that offer high-yield savings accounts require account holders to be at least 18 years old to sign contracts independently. A minor under 18 needs a parent or legal guardian to co-own the account. The good news: many banks that offer high-yield rates now allow this setup, and the account works the same way as an adult's account—your money earns interest at the stated rate, and you can withdraw it whenever you need to.
The parent or guardian's role is to open the account and remain on it as a joint owner. Depending on the bank, the minor may be able to manage the account online or through an app once it is opened, though the parent typically retains access and control. Some banks let you set it up so the minor can see the balance and make transfers, while others restrict access to the parent only.
Key Takeaways
- A parent or legal guardian must open the account and remain a joint owner; minors cannot open high-yield savings accounts on their own.
- Online banks like Marcus, Ally, and American Express offer high-yield savings accounts that accept minors as joint account holders, often with rates above 4% APY.
- The parent controls the account legally, but many banks allow the minor to view the balance and make transfers through their own login.
- No minimum age requirement exists at most banks, so even young children can have a high-yield savings account if a parent opens it with them.
- The money in a joint account belongs to both owners, so the parent can withdraw funds, though most parents do not do this without permission.
Which banks let minors open high-yield savings accounts
Most online banks that offer high-yield savings accounts accept minors as joint account holders. Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank all allow parents to open accounts for minors with no minimum age. These banks typically offer rates between 4% and 5% APY, though rates change frequently and vary by account type.
Traditional brick-and-mortar banks like Chase, Bank of America, and Wells Fargo also offer high-yield or money market accounts that minors can access as joint owners, though their rates are usually lower than online banks—often 0.01% to 0.5% APY. If you want the highest rate for your minor's savings, an online bank is the better choice.
Some banks have specific teen or youth savings accounts with lower rates but extra features like parental controls or spending limits. These are not high-yield accounts, but they may be worth considering if you want more oversight of the account. Compare the interest rate against the features to decide which fits your situation.
What you need to open the account
To open a high-yield savings account for a minor, you will need the parent or guardian's Social Security number, date of birth, and address. You will also need the minor's full name, date of birth, and Social Security number. Some banks ask for a government-issued ID for the adult, though not always for the minor.
The process is entirely online at most banks. You start the application as the parent, provide your information, then add the minor's details. The bank verifies your identity through a combination of credit checks and security questions. Once approved—usually within a few minutes to a few hours—the account is open and ready to fund.
You do not need to visit a branch or mail in documents for online banks. If you use a traditional bank, you may need to visit in person or mail in a copy of the minor's birth certificate or Social Security card, depending on their requirements.
How the account works once it is open
A joint account means both the parent and the minor are legal owners. The parent can deposit money, withdraw money, and close the account. The minor's access depends on the bank's rules and what the parent sets up. Some banks let the minor log in and view the balance but not withdraw funds. Others allow full access once the minor reaches a certain age, like 13 or 16.
Interest accrues on the full balance and is usually paid monthly or daily, depending on the bank. The interest is taxable income for the minor, so you will receive a 1099-INT form at tax time if the account earned more than $10 in interest during the year. The minor may need to file a tax return, though often they do not owe taxes because the interest is below the standard deduction.
The money in the account is legally owned by both of you. If the parent withdraws money without the minor's permission, that is legally allowed but ethically questionable and can damage trust. Most parents treat the account as the minor's savings and do not touch it.
Comparing high-yield savings to other options for minors
A high-yield savings account is one way to help a minor save money and earn interest. Other options include a regular savings account (lower interest, easier access at local banks), a certificate of deposit or CD (higher interest if you lock money away for a set time), or a custodial brokerage account (for investing in stocks or funds, more complex and riskier).
For a minor who is saving for a near-term goal—a car, college, or a large purchase within a few years—a high-yield savings account is usually the best choice. The money stays safe, earns a decent rate, and can be withdrawn without penalty. A CD makes sense if you know you will not need the money for 6 months to 5 years. A brokerage account is for longer-term wealth building and requires more knowledge.
| Account Type | Interest Rate | Access to Money | Best For |
|---|---|---|---|
| High-yield savings | 4–5% APY | Anytime, no penalty | Short-term savings goals |
| Regular savings | 0.01–0.5% APY | Anytime, no penalty | Convenience at local bank |
| Certificate of deposit | 4–5% APY | After set term, penalty if early | Money not needed for months or years |
| Custodial brokerage | Varies (stocks, funds) | Anytime, but value fluctuates | Long-term investing, college savings |
What happens when the minor turns 18
When the minor turns 18, they become a legal adult and can own accounts independently. Most banks allow the minor to take over the account and remove the parent as a joint owner, though the process varies. Some banks do this automatically; others require the minor to request it or open a new account in their name alone.
The minor should contact the bank before or shortly after turning 18 to ask about their options. If the account is at an online bank, the minor can usually handle this through the app or website. If it is at a traditional bank, they may need to visit a branch or call.
The money stays in the account throughout this transition. Interest continues to accrue at the same rate. The only change is who legally controls the account. This is a good time for the minor to review the account, understand how it works, and decide whether to keep it or move the money elsewhere.
Frequently Asked Questions
Can a 10-year-old have a high-yield savings account?
Yes. Most banks have no minimum age for minors on joint accounts. A parent can open a high-yield savings account with a 10-year-old as a joint owner. The parent controls the account legally, but the money can be set aside for the child's future and earn interest at the bank's rate.
Will the parent's credit be affected by opening an account for a minor?
No. Opening a savings account does not affect credit because it is not a loan or line of credit. The bank may do a soft credit check to verify identity, but this does not lower the parent's credit score. A joint savings account has no impact on credit.
What if the parent and minor disagree about withdrawing money?
Legally, the parent can withdraw money because they are a joint owner. However, this can damage trust and may violate a family agreement. If you are concerned about this, discuss expectations upfront. Some families use a rule that both owners must agree before withdrawals, enforced by honor rather than the bank's system.
Do I have to report the minor's interest income on taxes?
Yes, if the account earns more than $10 in interest during the year, the bank sends a 1099-INT form. You report this on the minor's tax return. The minor may not owe taxes because interest income below the standard deduction (around $13,850 for 2023) is not taxable, but you still file the form.
Can a minor open a high-yield savings account without a parent?
No. Banks require account holders to be 18 or older to sign contracts independently. A minor must have a parent or legal guardian as a joint owner. If a minor has no living parents, a legal guardian can open the account in the same way.