Ally Custodial Savings Account: A Comprehensive Guide for Parents

Opening a kids savings account is a great way to teach children how to save money and develop good financial habits from an early age. In this guide, we'll walk you through everything you need to know about opening an Ally custodial savings account for your child.

What is a kids savings account?

A kids savings account is a specialized bank account designed for children under 18 years old. It provides a safe and secure place for them to deposit and save their money. Opening a custodial savings account with Ally allows you to introduce your child to the world of banking and teach them valuable lessons about managing their finances.

What features should I look for in a kids savings account?

When choosing a kids savings account, there are several important features to consider:

• Low or no minimum balance requirement: Look for an account that doesn't require a large initial deposit or a high ongoing balance.
• Competitive interest rates: Find an account that offers a competitive interest rate to help your child's savings grow over time.
• No monthly maintenance fees: Avoid accounts that charge monthly fees, as these can eat into your child's savings.
• Online and mobile banking: Opt for an account that provides easy access to online and mobile banking tools, allowing your child to monitor their savings and make deposits or withdrawals.
• Educational resources: Some banks offer educational materials and tools to help children learn about money management and financial literacy.

How do I open a savings account for a child?

Opening a savings account for your child is a straightforward process. Here are the steps to open an Ally custodial savings account:

1. Step One – Go to the Ally website.
2. Step Two – Select Your Account Type.
3. Step Three – Review Your Account.
4. Step Four – Enter Your Information.
5. Step Five – Enter The Custodial Information.
6. Step Six – Submit Your Application.
7. Step Seven – Deposit Money.

By following these simple steps, you can open a custodial savings account for your child and start them on the path to financial success.

Can you put a savings account into a trust?

Yes, it is possible to put a savings account into a trust. However, this typically involves more complex legal and financial considerations. If you are interested in setting up a trust for your child's savings, it is advisable to consult with a legal professional who specializes in estate planning.

Can I open a joint account with a child?

Yes, many banks allow parents to open joint accounts with their children. This can be a great option if you want to give your child more responsibility and involvement in managing their finances. However, it's important to consider the potential risks and drawbacks of joint accounts, such as the child having unrestricted access to the funds and potential tax implications.

Do you pay taxes on children's savings accounts?

Children's savings accounts may be subject to taxes depending on the amount of interest earned. As of 2021, the IRS requires individuals to report any interest income over $10 on their tax returns. However, there are ways to minimize the tax impact, such as taking advantage of the child's standard deduction and utilizing tax-advantaged accounts like 529 plans.

Start savings early

One of the best ways to set your child up for financial success is to start saving early. By opening an Ally custodial savings account, you can teach your child the importance of saving, budgeting, and making smart financial decisions.

Explore more

If you're interested in learning more about teaching kids about money and other financial strategies, be sure to explore the resources available at Ally. They offer a range of educational materials and tools to help parents and children navigate the world of finance.

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