A baby’s bank account can be an early start toward a life of financial independence.
In fact, by opening a bank account for your baby, you’ll be able to start accessing high-interest deposits, long-term investment options, and more benefits that can help your newborn later in life.
In this article, we’ll explain the different types of accounts available to your baby, how to open them, and answer important questions to think through before applying.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Baby’s Bank Account
- Can I Open a Bank Account In My Baby’s Name?
- What Type of Bank Account Should I Open for My Baby?
- How to Open Bank Accounts for My Baby
- Frequently Asked Questions
- Ready to Explore Your Options?
Baby’s Bank Account
Baby’s bank account refers to a savings account that parents or guardians can open for a newborn child. Most financial institutions offer specific accounts for babies, including banks, credit unions, building societies, and even brokerage firms. That said, it’s important to consider tax implications and choose an account that best matches your child’s current (and future) situation.
With this in mind, most parents choose to open tax-sheltered accounts, such as a 529 college savings plan in the United States or similar options in other jurisdictions. Of course, if you and your child live in a tax-free (or territorial tax) jurisdiction, these considerations may not apply to you.
In addition to the type of account you open, the actual bank you choose is also incredibly important. Like opening any new bank account, the specific banks vary in terms of quality, safety, service, and more. We’ll discuss this particular consideration in greater detail below.
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Can I Open a Bank Account In My Baby’s Name?
Yes, you can open a bank account in your baby’s name. In fact, most financial institutions offer accounts for babies and encourage parents to open savings accounts by offering high-interest rates on qualifying deposits. After the account is opened, the parent is responsible for managing the account until the child reaches 18 years old.
What Type of Bank Account Should I Open for My Baby?
What type of bank account you should open for your baby ultimately depends on your goals, your (and your baby’s) tax residency, and how you plan to contribute to the account. In most cases, parents choose to open a basic savings account or a tax-sheltered account, which allows deposits to accumulate tax-free for an intended purpose such as paying for college tuition.
As mentioned, most parents choose to open some form of savings account for their baby. In fact, banks only offer savings accounts for newborns. This is very common in developed countries where tax incentives are created in order to maximize savings for children, such as the United States, Canada, the United Kingdom, and elsewhere.
Most banks do not offer current or checking accounts to newborns. Instead, these accounts are only available to children after they have reached a certain age, typically 12 or 13 depending on the country. That said, the basic savings account is not the only option available to newborns, as we discuss below.
Custodial Investment Account
Yes, it is possible to open an investment account for your baby. However, custodial investment accounts are not available in all jurisdictions. So, if this is something that you are interested in opening for your newborn, it’s important to do a detailed review of the available options. In short, a custodial investment account operates like a sub-account that is held in the name of your child. So, before opening, one parent will need to have an account with the desired brokerage first.
How to Open Bank Accounts for My Baby
To open a bank account for your baby, you’ll first need to choose a bank. If you are a foreign non-resident, you will have fewer options. However, you will also have some of the best options.
In fact, non-resident babies that live outside of their country of nationality (or the nationality of their parents) can often open offshore accounts with some of the best international banks available. That said, there are restrictions that you will need to navigate depending on the jurisdiction you choose to open with.
Of course, if you are a resident in your home country, then you will have a wider range of options available to you via domestic banks. And depending on the specific bank you choose, you will likely be able to access higher interest rates than those available to adult savers.
After selecting a bank, the process to open a baby’s bank account is very similar to opening a normal bank account. The only difference is that you are opening in the name of your child and will need to provide additional supporting documentation. Here’s a look at the common requirements.
Requirements to Open a Baby’s Bank Account
- Baby’s identification (birth certificate or passport)
- Parent’s identification (passport or driver’s license)
- Parent’s proof of address
- Parent’s income proof
- Confirmation of the parent’s fiscal residency
- Completed account opening documents
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into opening a baby’s bank account. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Can You Open a Bank Account for a Baby?
Yes, you can open a bank account for a baby. In fact, there are many account opening options available for babies in most countries, ranging from basic savings accounts to tax sheltered accounts and custodial investment accounts. However, accounts opened for babies will be controlled by the parent until the child turns 18 years old.
Can a Newborn Have a Bank Account UK?
Yes, a newborn can have a bank account in the UK. In fact, most UK banks offer savings accounts for babies that are held under the parents name. Additionally, the UK does offer tax sheltered accounts that can help babies compound their savings at higher rates than traditional savings accounts.
Should I Open Savings Accounts for My Babys?
Whether you should open a savings account for your baby’s future is a personal choice. But, ultimately, opening an account can help your baby prepare for a sound financial future, learn how to save and manage finances early, and better prepare them to be independent in the long run.
Ready to Explore Your Options?
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But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.
Of course, if you have any questions, please contact us directly.