How to Set Up a Savings Account for a Newborn

Open a savings account for your baby with the right ownership structure and start building their financial foundation early.

  1. Gather the required documents. You'll need your baby's Social Security card, birth certificate, and your own government-issued ID. Most banks also require proof of your address like a utility bill or bank statement. Apply for your baby's Social Security number first if you haven't already — this typically takes 2-3 weeks after filing the birth certificate.
  2. Choose between a custodial account or joint account. A custodial account (UGMA/UTMA) legally belongs to your child, and you manage it until they reach 18 or 21 depending on your state. A joint account with your child as a co-owner gives you permanent access but may complicate financial aid later. Most parents choose custodial accounts for true ownership transfer.
  3. Look for high-yield savings accounts with no fees. Online banks typically offer the highest rates, ranging from 3.5-4.5% APY as of 2026. Avoid accounts with monthly maintenance fees or high minimum balance requirements. Many banks waive fees entirely for minors, but confirm this applies to custodial accounts specifically.
  4. Open the account online or in-person. Both parents may need to be present for in-person applications, even if only one will be the custodian. Online applications are often simpler but may require mailing or uploading document copies. The initial deposit requirement is typically $1-100 for most high-yield savings accounts.
  5. Set up automatic monthly transfers. Even $25-50 per month adds up significantly over 18 years due to compound interest. At 4% annual growth, $50 monthly becomes about $15,000 by age 18. Set up the transfer from your checking account to happen right after your payday so you don't forget.
  6. Keep records for tax and transfer purposes. Interest earned on custodial accounts may be taxable under your child's Social Security number once it exceeds $1,300 annually. Save all bank statements and transfer records. When your child reaches the age of majority in your state, you'll need these records to formally transfer account control to them.