Generational wealth isn’t just about leaving your kids money. It can also mean helping them with their financial literacy now so that they manage money effectively as adults. One way to do this is with a custodial account. And one of the best custodial account options comes from one of the top-rated online banks: Ally. Let’s explore how to open a kids bank account with Ally so your child can see real-life money management in action!
7 Steps to Open a Kids Bank Account with Ally
Does a custodial bank account sound like it’s the right option for you and your family? Then you’re in luck! Ally keeps things simple. That means you can open a kids bank account with Ally in 7 easy steps!
Step One – Go to the Ally website
Ally is a fully online bank, so you have to visit their website to open an account. Once you are on their main site, click the “Savings” option and choose the “Open New Account” button.
Step Two – Select Your Account Type
Once you indicate if you currently bank with Ally or not, Ally will prompt you to choose the type of account you’d like to open. Choose “Custodial Account” and then indicate if you would like to open one of these account types:
- Online Savings
- Money Market
- Certificate of Deposit (CD)
- Interest Checking
Step Three – Review Your Account
Next, Ally will prompt you to review the type of account you are opening. This is a good way to make sure that your account matches your family’s money needs and goals.
As far as kids bank accounts go, you likely want to start with an Online Savings account. But choose whichever account is right for you!
Step Four – Enter Your Information
Since this is a custodial account, that means that you (or the adult opening the account on the minor’s behalf) needs to enter all of your legal information. That includes Social Security Number or taxpayer ID, legal name, birthdate, and address.
Follow the prompts and you’ll have this step completed in no time!
Step Five – Enter The Custodial Information
You also need to include details about the minor who you are opening the account on behalf of. Again, follow the simple prompts and this step is also a breeze.
Step Six – Submit Your Application
Once you’ve filled out the account application, you submit it and wait for Ally to approve the application. This usually happens very quickly. If you have any questions, it’s easy to reach out to Ally’s support team.
Step Seven – Deposit Money
After you’ve opened a kids bank account with Ally, it’s time to deposit money. That way, you can start teaching valuable lessons about money and saving for the future.
Open a Kids Bank Account with Ally – Frequently Asked Questions
If you already use Ally Bank for yourself, you might be wondering if you can also use Ally for a child savings account. Let's explore some frequently asked questions when it comes to opening a kids bank account with Ally!
Does Ally have a kid’s debit card?
No, Ally does not offer a kid’s debit card for their online savings product.
That being said, the custodial checking account comes with a free debit card with the custodian's name on it (adult reading this article, that'd be you!) and your kids can use it if you choose to let them. You may just want to supervise their use of it.
How old do you have to be to get an Ally bank account?
To open an Ally bank account, you need to be 18 years old. (FYI – You also have to be a US citizen or permanent legal resident with a Social Security number or taxpayer ID!)
Kids can open bank accounts with Ally, though, thanks to custodial accounts. In addition to offering a custodial savings account, Ally also offers custodial brokerage accounts through Ally Invest.
Savings vs. Brokerage – What's the difference when you open a kids bank account with Ally?
Ally actually offers several choices when it comes to opening a kids bank account. Generally speaking, families that are looking for a bank account mean they want a savings account.
Ally shines in that regard. Their custodial account is an online savings account that you can use to help your child save money and earn interest. They pay some of the most competitive interest rates online. That means that your child’s money will grow while teaching them valuable life skills.
Additionally, Ally offers a custodial brokerage account. This brokerage account is useful if you are looking to invest money on behalf of your child. Like the savings account, the money doesn’t truly belong to the child until they reach the age of majority (that’s a fancy way to say 18 or 21!) in your state.
Are Ally bank accounts free?
Yes! Ally bank accounts are free. You can open both checking and savings accounts for free with Ally.
Since you’re wondering how to open a kids bank account with Ally, you likely want to know more details about their savings account fees. When it comes to savings accounts, Ally offers two options: Online Savings and money market. These are free to open and there are no monthly maintenance fees.
The only fees you might run across with an Ally savings account are excess transaction fees ($10) and fees domestic wires and account research fees. To avoid an excess transaction fee, make sure you make no more than six withdrawals per month.
Final Thoughts on How to Open a Kids Bank Account with Ally
When it comes to managing your family’s money, there are many different options. You can open custodial accounts like UTMAs or UGMAs. You can also open a 529 savings plan. There are many ways you can help your child grow their money now to give them a headstart in adulthood. Learn more about those options here.
If an online savings account would fit your family’s needs, know that you can start saving with Ally in a matter of minutes by following these 7 steps!
Do you have an online savings account for your child? How are you helping your kids learn about managing their money?
Please let us know in the comments below.