Yes, but the account structure depends on the child's age and your relationship to the bank
A grandparent can open a bank account for a grandchild, but you cannot do it alone. Banks require either a parent or legal guardian to sign the account paperwork alongside you, or they require you to be the legal guardian yourself. If you are the custodial grandparent (meaning you have legal custody), you can open an account in the child's name with yourself as the account holder. If you are not the legal guardian, the child's parent must be present and must consent to the account in writing.
The account type matters too. For children under 18, most banks offer custodial accounts (sometimes called UTMA or UGMA accounts, depending on your state) or simple savings accounts with a parent or guardian as a co-owner. A custodial account lets you manage the money until the child reaches the age of majority — usually 18 or 21, depending on your state and the account type. Once that age arrives, the account transfers to the child's full control, and you lose access.
If you want to save money for a grandchild without opening a joint account, you can also open a dedicated savings account in your own name and name the grandchild as a beneficiary through your will or a payable-on-death (POD) designation. This keeps the money under your control during your lifetime but passes it to the grandchild when you die.
Key Takeaways
- A grandparent who is the legal guardian can open a custodial account in the grandchild's name without the parent present, but must show proof of guardianship.
- If you are not the legal guardian, the child's parent or legal guardian must be present and sign the account paperwork with you.
- Custodial accounts transfer to the child's full control at age 18 or 21 (depending on your state and account type), and you will no longer be able to access or manage the money.
- A payable-on-death savings account in your own name lets you keep control of the money during your lifetime and name the grandchild as the beneficiary.
- You will need to bring a government-issued ID, proof of the child's Social Security number or tax ID, and (if not the legal guardian) the parent's ID and signature.
What documents you need to bring to the bank
The exact documents vary by bank, but most require the same core set. Bring your government-issued photo ID (driver's license, passport, or state ID card). Bring the grandchild's Social Security number or Individual Taxpayer Identification Number (ITIN) — you will need the actual number, not just the card. If you are the legal guardian, bring a copy of the guardianship order or custody decree issued by a court.
If you are not the legal guardian, the child's parent or legal guardian must come to the bank with you. They will need to bring their own government-issued photo ID and sign the account paperwork. Some banks allow one parent to sign on behalf of both; others require both parents to be present if both have custody. Call the bank ahead of time to ask whether one signature is enough or if both parents must attend.
A few banks also ask for proof of the child's address (a utility bill or lease in the child's name, or a document showing your address if the child lives with you). This is less common for minors, but it does happen. Calling the bank's customer service line before you visit saves a trip back home for a missing document.
Custodial accounts and what happens when the child turns 18
A custodial account is a savings or investment account held in the child's name, with you (or another adult) named as the custodian. You manage the account and make all decisions about deposits, withdrawals, and how the money is invested until the child reaches the age of majority. At that point — usually age 18 in most states, though some states use 21 — the account becomes the child's property outright, and you lose all access and control.
This is a hard cutoff. You cannot keep managing the account after the child turns 18 just because you opened it. The child can withdraw all the money, close the account, or change the investment strategy without your permission. If you want to maintain some control over how the money is used, a custodial account is not the right tool.
Custodial accounts come in two main types: UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act). UTMA accounts are available in all 50 states and allow you to transfer a wider range of assets (real estate, artwork, business interests). UGMA accounts are older and more limited — they cover only cash, securities, and insurance. Most banks and brokerages now offer UTMA accounts. The age at which the account transfers to the child varies by state: some states use 18, others use 21, and a few allow you to choose. Ask the bank which age applies in your state.
Opening an account if you are the legal guardian
If you have a court order granting you legal guardianship or custody of the grandchild, you can open an account without the child's parent present. Bring your ID, the child's Social Security number, and a certified copy of the guardianship or custody order. Some banks accept a photocopy; others require the original or a certified copy from the court. Call ahead to confirm.
Legal guardianship is different from informal caregiving. If you are raising the grandchild but have no court order, you are not the legal guardian in the bank's eyes, and the parent must still sign. To become the legal guardian, you must file a petition in family court in your county. The process varies by state, but typically takes several weeks to several months and may require the parent's consent or a hearing. If the parent is unavailable, deceased, or unfit, the court can grant guardianship without consent, but you will need to show cause.
Once you have guardianship, opening the account is straightforward. You can choose a custodial account (which transfers to the child at 18 or 21) or a regular savings account in the child's name with yourself as the account holder. With a regular account, you keep control even after the child turns 18 — but the child can also access the account once they reach the age of majority, depending on the bank's rules.
Opening an account if you are not the legal guardian
If the child's parent is alive and has custody, they must be present when you open the account. The parent signs the account paperwork alongside you, and both names appear on the account. The parent retains full rights to the account and can withdraw money, close it, or remove you as a co-owner at any time.
This arrangement works well if you and the parent agree on the account's purpose and trust each other. It is less suitable if you want to ensure the money is used only for the grandchild's benefit or if you fear the parent might withdraw the money for their own expenses. In those cases, a payable-on-death account in your own name (see below) gives you more control.
If the parent refuses to open an account with you, or if you cannot locate the parent, you cannot open a custodial account in the child's name. Your only option is to save money in your own account and name the grandchild as a beneficiary.
Using a payable-on-death account as an alternative
A payable-on-death (POD) account is a savings account in your own name with a named beneficiary. When you die, the money passes directly to the beneficiary — in this case, your grandchild — without going through probate. During your lifetime, the account is entirely yours. You can deposit, withdraw, or spend the money however you wish. The grandchild has no access and no claim on it.
This structure is useful if you want to save for a grandchild but are not ready to give up control of the money, or if the child's parent is unreliable or hostile. You keep the money safe and available for your own needs. If you die before spending it, the grandchild inherits it. If you spend it all, there is nothing left to pass on — but that is your choice to make.
To set up a POD account, open a regular savings account at your bank and ask to name a payable-on-death beneficiary. You will need the grandchild's full name and Social Security number. The bank will add this designation to the account at no extra cost. You can change or remove the beneficiary at any time while you are alive. When you die, the bank will transfer the account to the grandchild upon proof of your death (usually a death certificate) and the grandchild's identity.
One drawback: if the grandchild is a minor when you die, the bank cannot transfer the account directly to them. Instead, the money may go into a guardianship account or be held until the grandchild reaches age 18 or 21, depending on your state and the bank's policy. You can avoid this by naming a trusted adult (such as the child's parent) as the POD beneficiary and asking them in your will to hold the money for the grandchild's benefit — but this requires trust and a clear written instruction.
Tax and financial aid considerations
Money in a custodial account is considered the child's asset for tax purposes. If the account earns interest or investment income above a certain threshold (called the "kiddie tax" limit, which changes yearly), the child may owe federal income tax on the earnings. The exact amount depends on the child's age and total income. A bank can provide information about the current year's threshold, or you can check the IRS website.
Custodial accounts also affect financial aid. If your grandchild applies for federal student aid (FAFSA), the money in a custodial account in their name counts as their asset and reduces their aid may be able to access more sharply than money in a parent's account would. Money in a POD account in your name does not count against the grandchild's aid may be able to access at all, since the child does not own it yet.
If you are saving for college, talk to a tax professional or financial advisor about whether a custodial account, a 529 education savings plan, or a POD account makes the most sense for your situation. The choice affects both taxes and financial aid.
Frequently Asked Questions
Can I open an account for a grandchild without telling the parent?
No, not unless you are the legal guardian. If the parent has custody, they must sign the account paperwork. If you open an account without the parent's knowledge or consent, the parent can demand access or closure once they find out. If you are the legal guardian, you can open an account without the parent's involvement, but the parent may still have visitation or other rights depending on the custody order.
What if the grandchild's parents are divorced?
Both parents typically have equal rights to the account unless a custody order says otherwise. If one parent has sole custody, only that parent needs to sign. If custody is shared, some banks require both parents to sign; others accept one signature. Call the bank and describe your situation — they can tell you what they require. Bring any custody order to the bank so they can see who has legal authority.
Can I withdraw money from a custodial account for the grandchild's expenses?
Yes, you can withdraw money to pay for the child's food, education, medical care, housing, and other direct expenses. You cannot withdraw money to pay your own bills or to reimburse yourself for caregiving. The money must be used for the child's benefit. Keep receipts and records in case anyone questions how the money was spent.
What happens if I die before the grandchild turns 18?
If you are the custodian of a custodial account and you die, the account does not automatically close. The money stays in the account until the child reaches the age of majority (18 or 21, depending on your state). A court may appoint a successor custodian to manage the account, or the money may be held by the bank or a trustee. Name a successor custodian when you open the account if possible, so there is no gap in management.
Can a grandchild have their own bank account without an adult?
No, not until they turn 18. Before that, a parent or legal guardian must be on the account. Once the grandchild turns 18, they can open their own account in their name alone. If they have a custodial account, it automatically becomes theirs at 18 or 21 (depending on your state), and they can do whatever they want with it.