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Choosing the Right Account Type for Children


Choosing the Right Account Type for Children

When opening a savings account for a child, it’s important to consider what purpose the account will serve. For example, will you use it as a tool to teach your child about the power of saving or do you intend to use it to hold funds for your child to access in the future? SLFCU offers two main types of savings accounts for minors – primary accounts and custodial accounts.


A primary account is a great way to help kids learn how to be financially responsible and manage their own money. It may be opened by the child or by a parent or guardian in the child’s name. Children with an SLFCU primary account are credit union members. These accounts include the option to establish a joint owner, such as a parent or relative; the joint account owner has access to the account, which can allow that person to oversee account activity.

With a primary account, children will have the ability to learn money management through practical experience transacting on their account. They will also be able to take advantage of additional credit union products and services as they get older.

If a parent or guardian is added to the account, primary accounts can allow children to save and spend their money with supervision. Children with their own primary accounts can also participate in the Savings Laboratory program, which is designed to help parents teach money management skills to their children from an early age.


A custodial account might be a good option if your goal is to put money aside for the child’s benefit without allowing the child access to the account. The designated custodian is the only person who may withdraw the funds and is obligated to do so only for the benefit of the minor.

Money deposited into a custodial account, whether by the custodian or another individual, is an irrevocable gift to the child beneficiary.

These accounts are opened with the intent to transfer ownership of the funds to the minor once he or she reaches the age specified by state law, usually 18 or 21.*


A child’s Social Security Number and date of birth are required to open either a primary or custodial account. Additional documents, such as a birth certificate, may also be required.

Many families choose to open both a primary account and a custodial account for children since they serve different purposes. Talk to an SLFCU representative about your options; stop by any branch or call 505.293.0500 or 800.947.5328.

*SLFCU offers custodial accounts as permitted by the Uniform Transfer to Minors Act, or UTMA.

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