At What Age Can You Open a Savings Account?

Savings accounts provide a secure place to store funds and save for future goals. They offer a reliable method for managing financial resources and building a habit of regular saving. Understanding how these accounts function is a first step toward effective financial planning.

General Age Requirements for Opening a Savings Account

Opening a savings account independently requires an individual to be at least 18 years old, the age of majority in most places. This age requirement stems from the legal principle that individuals must be old enough to enter into binding contracts.

A banking agreement, which includes opening and managing a savings account, is considered a legal contract. Without meeting this age threshold, a person cannot open an account solely in their name. Banks and financial institutions adhere to these regulations to ensure that accountholders possess the legal capacity to understand and fulfill the terms of their financial agreements.

Options for Minors to Have a Savings Account

While individuals under 18 cannot open a savings account independently, minors can have one through other structures. A common approach is a joint account, where a minor is listed as a co-owner alongside an adult. This adult, usually a parent or legal guardian, maintains control and responsibility for the account until the minor reaches the age of majority. The adult’s signature is required for most transactions, providing oversight.

Another option is a custodial account. In these arrangements, an adult acts as a custodian, managing the assets within the account for the minor’s benefit. The funds legally belong to the minor, but the custodian has the authority to make investment and withdrawal decisions until the minor reaches a specific age, often 18 or 21. For both joint and custodial accounts, institutions require the minor’s Social Security Number and a birth certificate for identification. The adult will need their Social Security Number and a government-issued identification.

Steps to Open a Savings Account for a Minor

To open a savings account for a minor, first select a financial institution, which could be a traditional bank or a credit union. The adult and minor will then proceed with the application, which often entails visiting a bank branch or using online portals.

During the application, provide the minor’s identification details and the adult’s government-issued identification and Social Security Number. Account agreements and disclosures, outlining the terms and conditions of the account, will then need to be reviewed and signed by the adult. An initial deposit will fund the account, making it active.