What types of child savings accounts exist?
The core structure is the custodial account. The verified sources cover US custodial accounts only. Other types are named below, but their rules are not in the source sheet, so they are described only in general terms.
| Feature | Custodial account (US) |
|---|---|
| Legal owner | The child |
| Who manages it | A custodian, who may be any adult |
| Age of control | Passes to the child at 18 or 21, depending on state; in some states as late as 25 |
UTMA and UGMA
Custodial accounts are usually governed by state law. The source sheet does not describe the terms of the UTMA or UGMA frameworks or list which states use each one.
529 education plans
The verified sources do not describe 529 education plans, so no comparison with custodial accounts can be made from them. The one difference that can be stated is ownership: a custodial account belongs to the child, and contributions cannot be withdrawn by the giver.
Minor accounts with a parent co-owner
The sources do not cover minor accounts held jointly with a parent. The custodial rules above apply to accounts where the child is the owner and an adult is the custodian. How a co-owner arrangement changes ownership, control, or the age of transfer is not established in the verified material and should be checked with the account provider.
How do you open a custodial savings account?
Opening a custodial account follows a short sequence at most institutions: choose a provider that offers this account type, submit the application (PNC confirms online opening; ask your provider about branch options), name the custodian and the minor beneficiary, then make the first deposit. PNC Bank states that custodial accounts can be opened online (PNC Bank, 2026).
Online opening versus a branch appointment
The two routes reach the same account type, so the choice depends on how you prefer to complete the application.
| Route | What the sources confirm | Source |
|---|---|---|
| Online | PNC lets you open a custodial account online | PNC Bank, 2026 |
| Branch appointment | No branch-specific steps are listed in the fiche | Not stated |
For the online route, the application is completed in the institution’s digital channel. For a branch appointment, you complete the same application with staff. Check with the institution which documents it requires for your chosen route before you start, because the sources do not list them for each channel.
Naming the custodian and designating the minor beneficiary
Two roles are fixed when the account is opened. The custodian is the adult who manages the account. The minor beneficiary is the child who owns the funds.
- The adult opening the account is named as custodian. Any adult qualifies, and the custodian need not be a parent.
- The child is named as the minor beneficiary on the same application.
- The account is set up in the child’s name, so the deposits are linked to the child from day one.
Initial funding and first deposit
The first deposit is the point where the account starts to hold money, and the rules attached to it are set from that moment.
| Funding rule | What the fiche states | Source |
|---|---|---|
| Treatment of deposits | Deposits are treated as gifts | PNC Bank, 2026 |
| Annual gift limit | Each giver can gift up to $19,000 a year without filing a gift tax return | J.P. Morgan Wealth Management / Chase, 2026-07-20 |
The fiche does not list a minimum opening deposit, so the amount required to open the account is set by each institution and must be confirmed with it directly.
What documents do you need?
A custodial account requires identity data for two people: the child who owns the assets and the adult who manages them. According to J.P. Morgan Wealth Management / Chase (updated 2026-07-20), the institution asks for a specific set of personal details for each party. Gather the following information before you start the application.
Child’s details
| Item | What to provide |
|---|---|
| Full legal name | The child’s complete legal name |
| Date of birth | The child’s birth date |
| Social Security number | The child’s SSN |
| Home address | The child’s residential address |
Custodian’s details
The custodian is the adult who opens and manages the account.
| Item | What to provide |
|---|---|
| Full name | The custodian’s complete legal name |
| Date of birth | The custodian’s birth date |
| Social Security number | The custodian’s SSN |
| Government photo ID | A government-issued photo identification document |
| Contact details | The custodian’s contact details |
The child’s home address and the custodian’s contact details are both part of the required information. Keep the same spelling of the child’s full legal name on every form you complete, so that the account records match the child’s identity documents.
Who controls the money and until when?
Once money goes into a custodial account, the child owns it, and the adult who opened the account controls it on the child’s behalf. Contributions are irrevocable: the giver cannot take the money back or redirect it to another purpose. The custodian manages the funds until control passes to the child.
Irrevocable contributions and the child’s ownership
Every deposit becomes the child’s property at the moment it is made. The adult cannot reclaim it, even if the child’s needs change or the adult’s circumstances do.
The custodian’s fiduciary duty and permitted spending
The custodian has a fiduciary duty, meaning they must act in the child’s interest when handling the account. Under PNC’s rules, withdrawals must benefit the child. The custodian therefore cannot use the funds for personal expenses or for costs that do not serve the child.
Control transfer age
Control passes to the child at 18 or 21, depending on state law. In some states, the transfer happens as late as 25. The age that applies is set by the state’s rules, not by a single national standard. Once control passes, the young adult can withdraw the funds without the custodian’s approval.
Are there tax rules to know?
Two separate tax rules matter for custodial accounts. The child’s kiddie tax applies to unearned income such as interest, dividends, and capital gains, and the annual gift exclusion governs how much can be contributed without filing a gift tax return. Both figures below are the 2026 amounts from the fact sheet.
Kiddie tax brackets (2026)
| Portion of the child’s unearned income | Tax treatment |
|---|---|
| First $1,350 | Tax-free |
| Next $1,350 | Taxed at the child’s rate |
| Above $2,700 | Taxed at the parents’ rate |
Only unearned income is affected by these brackets. Earned income, such as wages from a part-time job, is outside this calculation.
Annual gift exclusion (2026)
Each giver can contribute up to $19,000 a year to a custodial account without filing a gift tax return. The limit applies per giver, so several relatives can each contribute up to that amount in the same year. Any amount above the limit may require a gift tax return even though no tax is necessarily owed.
Reporting the child’s unearned income
Whether the child’s unearned income has to be reported, and on which return, depends on the amount and the tax year. Check the official IRS form instructions for the year in question before filing. Which return it goes on, and which form applies, depends on the income level and the tax year, so check the official form instructions for the year in question before filing.
How does a custodial account affect financial aid?
A custodial account is reported as a student asset on the FAFSA, the US form used to determine eligibility for need-based federal aid. According to J.P. Morgan Wealth Management / Chase (2026-07-20), this treatment can reduce need-based aid more than the same money held in parent-owned assets would. A balance in the child’s name can therefore lower a family’s aid eligibility even when the parents’ own savings stay the same.
Assets are reported differently depending on who holds them:
- Custodial account (in the child’s name): counted as a student asset on the FAFSA.
- Parent-owned savings: the fiche does not describe how these are reported, so check the current FAFSA instructions for the parent section.
The difference matters because need-based aid is calculated from the assets reported on the form. A custodial balance that grows large can reduce eligibility faster than the same amount kept in the parents’ name. The source gives no formula or percentage for this effect, so the actual impact depends on the household’s full financial picture.
Before choosing where to hold money intended for education, the practical step is to:
- List every account that will hold the funds and identify whose name is on each one.
- Check the current FAFSA instructions for how each account type is reported.
- Estimate how each option could affect the aid calculation, following the official FAFSA instructions.
Which bank or credit union should you ask?
Custodial accounts are offered by providers such as PNC Bank and J.P. Morgan Chase, whose published terms are the sources used here. Compare each provider on opening method, required documents, fees and minimum deposit. The source set includes published terms from PNC Bank and J.P. Morgan Chase. A credit union needs a different set of questions because its terms are not covered by the same sources. Compare each provider on the points below before you choose.
PNC Bank
Confirm the current online opening steps and any account fees directly with PNC, because the source does not list them.
J.P. Morgan Chase
J.P. Morgan Wealth Management / Chase lists the identification required for each party (J.P. Morgan Wealth Management / Chase, 2026-07-20):
- Child: full legal name, date of birth, Social Security number, and home address
- Custodian: name, date of birth, Social Security number, government photo ID, and contact details
Questions to ask a credit union about minors
The fact set does not include credit union terms, so use this checklist and request the answers in writing:
- Does the credit union offer a custodial or minor account, and what is the product name?
- Must the custodian, the child, or both be members?
- Which identity documents are required for each person?
- Can the account be opened in a branch, online, or both?
- How is a custodian replaced, and who can sign on the account?
- What are the minimum deposit, minimum balance, and fees?
Frequently asked questions
What information do you need to open a custodial account for a child in the US?
You need the child’s full legal name, date of birth, Social Security number and home address. You also need the custodian’s name, date of birth, Social Security number, government photo ID and contact details.
Can money be taken back out of a child’s custodial account by the person who deposited it?
No. Contributions are irrevocable and belong to the child, and withdrawals must be used for the child’s benefit. The custodian manages the funds under a fiduciary duty, which means acting in the child’s interest.
How is a child’s investment income taxed in 2026?
Under the kiddie tax rules for 2026, the first $1,350 of a child’s unearned income is tax-free and the next $1,350 is taxed at the child’s own rate. Unearned income above $2,700 is taxed at the parents’ rate.
