Yes, you can absolutely set up a financial account for your grandchildren to help build their future, often acting as the custodian. Options include custodial savings/brokerage accounts (UTMA/UGMA), 529 education savings plans, or U.S. savings bonds, which allow you to manage funds until they reach the age of majority.
Grandparents can open various accounts for grandchildren, including flexible Custodial Accounts (UGMA/UTMA) for general use, dedicated 529 Plans for education (which grandparents can own and control, with no financial aid impact from 2024-25), tax-advantaged Roth IRAs if the child earns income, or simple Kids' Savings Accounts, plus options like CDs and Savings Bonds, with choices depending on goals for flexibility, control, and tax benefits.
Grandparents opening a savings account for a child
A grandparent can open a savings account for their grandchild. It has to be in the child's name and they must show documentation such as the child's birth certificate.
Greater Bank is one example of a provider that allows grandparents to open an account on behalf of their grandchildren, with its Life Saver account. The bank says that this account can help children start good habits early, and see the rewards of savings as their balance grows each month with interest.
By setting up an informal trust account, you can make irrevocable gifts of cash or securities to your grandchild. An adult (the trustee) administers the account until your grandchild reaches legal age, which is determined by provincial law.
One can also open up TFSAs for family members including minors, as well as to set up TFSAs for specific purposes like paying off a child's education.
State-administered 529 education savings plans are the go-to choice for many families, and their generous tax benefits are a big reason why. The money your grandchild withdraws for qualified education expenses — including private K-12 education expenses — is completely tax-free.
The answer is yes, with the right identity information, grandparents can set up savings accounts for grandchildren. You could start by asking your bank about the children's accounts they offer, as well as interest rates and any age limits.
Five Smart Ways to Plan for your Grandchildren's Financial Future
You can gift a grandchild up to the annual gift tax exclusion amount (around $19,000 per person in 2025/2026) without any tax implications or reporting; gifts exceeding this amount must be reported on a gift tax return (Form 709) but only count against your substantial lifetime gift tax exemption (nearly $14 million in 2025), meaning you likely won't pay tax until you've given away massive sums over your lifetime. Married couples can combine their exclusions to give double.
Yes, you absolutely can open a bank account for your child, typically as a joint account with you as the parent/guardian, to teach them financial responsibility, with options ranging from basic savings to teen checking with debit cards. You'll need your ID and your child's information, and while some accounts can be opened online, many require an in-person visit to a bank branch, especially for younger kids.
You can add your grandchildren to your will and give them either a fixed amount or a percent of your estate. Setting up a trust for your grandkids may give them lower tax options and may also give you more control over how and when they can use the funds. You can: Set guidelines for how they should use the money.
Can I open a savings account for my grandchild?
The best way to invest $1000 for a child depends on your goal, with a Custodial Brokerage Account (UGMA/UTMA) offering the most flexibility for general uses (car, home) and a 529 Plan ideal for tax-advantaged college savings, while a Roth IRA for Kids suits earning children for long-term growth, all leveraging long-term growth potential through ETFs or index funds, with the new "Trump Account" being a specific, limited-time option for younger kids.
Where to store savings for grandchildren
The best account for a grandchild depends on your goal: a 529 Plan is ideal for tax-free education savings; a Custodial Account (UGMA/UTMA) offers broad flexibility but transfers control at adulthood; a Custodial Roth IRA is great for retirement if the child has earned income; while a simple High-Yield Savings or TreasuryDirect Savings Bond works for short-term goals with less investment risk, providing flexibility for general use.
Grandparents savings – what we'd go for
Kent Reliance pays 4.18% and grandparents can open the account on behalf of a grandchild. Once the child turns seven you'll have the option to grant them access to the account, however you can choose to wait until they are 18 if you prefer. The top online accounts pay less.
I bonds can be good investments for parents or grandparents who are looking to save money for their children and grandchildren. First, I bonds can be a steadier and more predictable investment than the stock market – its redemption value will not decline because it is backed by the U.S. government.
You can typically inherit a large amount without federal taxes because the tax applies to the deceased's estate, not the recipient, and the exemption is very high: $13.99 million in 2025 and $15 million in 2026 per person, meaning most inheritances fall below this threshold. The key is that the estate's total value must exceed these limits for any tax to be owed by the estate. Inheritances themselves (cash, property) are generally not income, but earnings on them (like interest/dividends) or pre-tax retirement funds (like IRAs) are taxable.
A trust can protect your assets by ensuring they're distributed according to your wishes. Other advantages a trust offers include avoiding the probate process and potential tax benefits. A revocable trust offers flexibility in changing the terms of the trust agreement by executing an amendment to the document.
In theory, you are free to give as much money as you like to your children or other family members, but in order for the gift to be tax-free, you must live for at least seven years after the date it was made. This is a Potentially Exempt Transfer (PET), sometimes known as the seven-year rule for gifts.