Should I open a Custodial Account or a Joint Account?

A Custodial Account, also known as a PAUTMA (Pennsylvania Uniform Transfer to Minors Act) Account may be set up for an individual who is under 21 years of age. Not only is the child unable to make withdrawals from this account, but they are unable to make deposits as well. The custodian is required to maintain records of all transactions regarding this account, and the assets may be counted as available to the child when determining eligibility for college aid. When the minor reaches 21, the custodian must close this account and transfer the money to the beneficiary in most cases. The PAUTMA can be found at 20Pa.C.S.A. 'a4 5301, et seq.. To open a Custodial Account, click here.

By opening a Joint Account with your child you have the opportunity to teach them about money and managing their account. As they grow they'll enjoy seeing their balance increase as they make deposits to their account. When they're old enough, a checking account with debit card, a VISA credit card, and even a loan may be opened on this account. This provides a gradual transition for them to become responsible for their finances. Click here to open a Joint Account.