How to Open a Savings Account for a Grandchild (and When to Pick a Better Account)

Yes, a grandparent can open a savings account for a grandchild in the United States. The most common way is a custodial (UTMA/UGMA) savings account in the grandchild's name, with you as custodian. You'll need the child's Social Security number, so plan on talking to the parents first. You can also open a joint account where the bank allows it, keep an account in your own name for the grandchild, or add money to an account the parents already opened.

Four ways to set up a savings account for a grandchild

The setup decides who owns the money, who can take it out, and what happens when your grandchild grows up. The interest rate comes second.

A custodial account is the clearest "it's theirs" gift. The transfer age, usually 18 or 21, is in the 50-state table. For how specific banks set up kids' accounts, including fees and which online banks don't serve minors, see the kids' savings account comparison.

Can a grandparent be a joint owner?

Sometimes. It depends on the bank. Many banks want a parent or legal guardian as the adult owner on accounts for younger children, and some relax that for teens. Ask the bank directly before you apply.

A joint account also gives both owners equal rights. Your grandchild could withdraw the money, and so could you.

What about an account in your own name?

You can open a regular savings account in your name and set it aside for a grandchild. Many grandparents also name the grandchild as the payable-on-death (POD) beneficiary, so the account passes to them later.

You keep full control, and you can change your mind. But the money isn't the grandchild's today. It's closer to an estate-planning tool than a gift, so mention it when you talk with an estate attorney.

What do you need to open one?

For an account in the grandchild's name, banks usually ask for:

• The grandchild's Social Security number
• Their full legal name, birth date and address
• Your government-issued ID
• An opening deposit, if the bank requires one

The SSN means looping in the parents. That call is worth making anyway, since some banks want a parent involved on minor accounts. The same applies to investment accounts for a grandchild.

The steps

1. Pick the setup: custodial, joint, your own name, or adding to the parents' account.
2. Get the grandchild's details from the parents.
3. Choose a bank or credit union, and compare the current rate and fees.
4. Open it online or at a branch. For a custodial account, you sign as custodian.
5. Fund it, and consider a small recurring transfer.

Is a savings account the right gift?

It fits money your grandchild will use within a few years, or a young child learning to save. For money meant to grow for 10 or 20 years, savings interest rarely keeps pace with inflation.

For a long-horizon gift, families often look at a 529, which you can own and control, a UTMA custodial investment account, or a custodial Roth IRA if the grandchild has earned income. The side-by-side is in saving and investing for grandchildren, and the 529-versus-UTMA choice is in grandparent 529 vs. UTMA.

Taxes and financial aid

• Gift tax. For 2026, each grandparent can give up to $19,000 per grandchild with no gift-tax filing. See gift tax and custodial accounts.
• Interest. In a custodial account, interest is the child's income. For 2026, the first $1,350 is tax-free and the next $1,350 is taxed at the child's rate, under the kiddie tax. Savings interest rarely gets close.
• Financial aid. The FAFSA counts a custodial account as the student's asset, assessed at 20% a year. An account in your own name isn't the student's or parents' asset. More in grandparent 529s and the FAFSA.

For anything beyond the basics, a tax professional can confirm how it applies to your family.

Where MemoryBank fits

Grandparents often give to an account at one bank while the parents keep others somewhere else. MemoryBank connects the accounts a family already opened, savings included, and shows your grandchild one kid-friendly view. Parents can invite you to the family view so you can follow the gift too. If you'd rather give the app itself, a MemoryBank gift subscription covers 3 months or a year. It doesn't move money into any account.

MemoryBank is not a brokerage. It cannot receive, keep or transfer securities.

What to do next

1. Decide whether the money should be your grandchild's now, or stay yours.
2. Call the parents for the SSN, and to see what accounts already exist.
3. Compare two or three banks with the setup you picked.

Bank policies on minor and joint accounts vary by institution; confirm with the bank. MemoryBank isn't affiliated with any bank and doesn't recommend one.

Frequently asked questions

Can a grandparent open a savings account for their grandchild in the United States?

Yes. The usual way is a custodial UTMA/UGMA savings account in the grandchild's name with the grandparent as custodian. You'll need the child's Social Security number. Some banks also allow a grandparent as a joint owner, though many require a parent or guardian for young children.

What is the best savings account for a grandchild?

Start with the setup. A custodial account makes the money the grandchild's, a joint account gives you both equal access, and an account in your own name keeps control with you. Then compare fees, minimums and the current rate at a few banks.

Can I open a bank account for my grandchild without the parents?

Usually not in practice. Anything in the grandchild's name needs their Social Security number, which typically means asking the parents. An account in your own name, set aside for the grandchild, doesn't need it.

Is a regular savings account good for a grandchild?

It's a good fit for money they'll use within a few years. For a gift meant to grow for a decade or more, savings interest rarely keeps up with inflation, so families often look at a 529, a UTMA or a custodial Roth IRA instead.

What happens to a custodial savings account when my grandchild grows up?

It transfers to them at your state's transfer age, usually 18 or 21. From then on the money is theirs to use however they choose.

How much can a grandparent give a grandchild without gift-tax paperwork?

For 2026, each grandparent can give up to $19,000 per grandchild with no gift-tax return. Two grandparents can each use their own exclusion for the same grandchild. A tax professional can confirm how larger gifts are handled.