Can You Open a Bank Account for Someone Else?

By Ashley Kilroy · October 02, 2022 · 9 minute read

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Can You Open a Bank Account for Someone Else?

The answer to the question, “Can I open a bank account for someone else?” is yes, it’s possible, but there is a condition. In order to open a bank account for someone else, you need to also be an account holder or have a certain form of access. For example, you can either open an account for your child or someone like your spouse or business partner with whom you share financial interests. You may also be able to open an account for someone who has deemed you their power of attorney. But, in most cases, the other party has to be present during the account opening process.

So, if you’re wondering how to open a bank account for someone else, here’s what you need to know about the ins and outs of the process. We’ll delve into:

•   How do bank accounts work?

•   In which situations you can open an account for someone else

•   What is required to open an account for another person

Let’s take a closer look.

How Do Bank Accounts Work?

Bank accounts act as a vessel to park and often use your money. Typically, banks, credit unions, and other financial institutions offer several different types of accounts. Each works in its own way. Some standard offerings include:

•   Checking accounts. A checking account allows the account holder to deposit funds. Then, they can use the funds to complete everyday transactions like paying bills, writing checks, or shopping with a debit card. While some accounts earn interest, it is often a tiny percentage.

•   Savings accounts. Unlike checking accounts, savings accounts are designed to hold and grow your money for an extended period. You can then use this money in the future or for unexpected expenses. Savings accounts often earn interest. Federal law may restrict the number of withdrawals you can take out of a savings account, though this limitation was suspended due to the COVID-19 pandemic.

•   Money market accounts. Similar to savings accounts, money market accounts earn interest. Some money market accounts may have a debit card and check-writing features. Also, the law usually restricts the number of withdrawals you can make from this type of account.

Is It Possible to Open a Bank Account for Someone Else?

Now, for the question of whether you can open a bank account for someone else. There are three circumstances in which banks allow you to open an account for someone else. Either you’re opening the account for a minor, a joint account holder, or you hold power of attorney for another individual. Here’s a bit more detail on each of these situations.

•   Bank account for a minor. Minors cannot open a bank account according to federal law. Therefore, if you want to begin teaching your kids the concept of saving early on, you can open an account for a child. You do so by opening a custodial account or joint account. With a custodial account, the child owns the funds within the account, but the parent manages them until the child reaches the age of maturity, which is usually 18 years old. With a joint account, you and your child both have access to the account. As the parent, though, you can monitor the activity within the account, like setting withdrawal limits.

•   Bank account for a co-owner. Your other option is to become a joint or co-owner of a bank account. When you set up a joint bank account, you and the other co-owner have access to the funds. In many cases, you will be able to make deposits and withdrawals at your discretion; in others, you will need the other account holder’s approval to conduct transactions. Usually, you open a joint account with someone you have already established a financial relationship with, like a spouse or other family member. Once you open the account, you can go about managing the joint bank account together.

•   Power of attorney. When someone gives you a power of attorney, you can manage their bank accounts on their behalf. However, you must keep your own money separate from their accounts. When opening the account, the bank usually requires a legal power of attorney document and a photo ID. You may also need to fill out the bank’s power of attorney form. Also, the account will usually be in the other party’s name, but you will have authority over the account.

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Steps to Open a Bank Account for Someone Else

There are typical steps for starting a bank account, though every bank, credit union, or other financial institution may have a slightly different process. Although the details may vary, here are some common steps you will usually take when opening a new bank account for someone else.

Valid Proof of Identity

The first step to opening a bank account for someone else is to provide a valid proof of identification. When you’re opening an account for a minor, you and your child must be present during the account opening process. You and your child will also have to provide a form of identification such as:

•   U.S. driver’s license

•   Social Security card or ITIN

•   Birth certificate

•   Immunization record

•   School photo ID

•   Passport/alien ID

When you’re opening an account with someone else who is not a minor, both parties usually must be present to open the account. Also, you will have to provide the same forms of identification. Some common forms of identification include:

•   U.S. driver’s license

•   U.S. state ID

•   Passport

If you’re a power of attorney for someone else, you will also need to bring your notarized power of attorney legal document. Depending on the bank, they may also require you to fill out a power of attorney form to accompany the rest of the documentation.

Basic Information

In addition to showing valid proof of identification, you will likely need to fill out an application. On the application, the bank will request personal information from each account holder. This information can include:

•   Social Security number or Tax ID (for business accounts)

•   Utility bill to verify current address

•   Name

•   Address

•   Phone number

Initial Deposit

Some banks may also require an initial minimum deposit or a monthly minimum balance to keep the account active. This means that you must deposit a certain amount to open the account and/or have a certain amount of money in the account to maintain it. Typically, banks require between $25 and $100 to open an account. However, some institutions may have no deposit requirement.

So, if this may be a hurdle for you, ask your bank about its requirements before starting the application process. It’s a good idea to know upfront if you’ll need to deposit funds to activate it.

💡 For more help: How to Set Up and Open a Bank Account

Things to Consider When Opening a Bank Account for Someone Else

We’ve established that opening a bank account for someone else is usually the same as starting a joint, or shared, account. Now, opening a bank account for someone else may involve a family member; say, your goal might be to enhance your child’s financial literacy or combine finances with your spouse. In these cases, you probably feel pretty sure the other party is trustworthy.

But what about opening an account for someone else who is a friend, distant relative, or business associate? Consider these points before you open a bank account for someone else.

•   Limited privacy. When you combine your finances with another individual, you forgo your privacy when managing your money individually. For example, the other account holder can see all of the transactions within the account and know how you spend your money. So, if this raises some concerns, you may want to reconsider a joint account while you build trust with that individual.

•   Shared financial responsibilities. Opening an account with someone else means you may now need to share financial responsibilities such as paying bills or saving for joint retirement (as well as any account fees). This can work out well if both parties contribute equality. But, if the contributions or withdrawals are relatively uneven, this financial partnership could be harmful. Therefore, before opening a bank account for someone else, discuss each party’s contributions and expectations for managing the account.

•   Use multiple accounts. If the idea of merging financial lives doesn’t suit you, you might want to continue managing your money separately, and use the joint account for a few shared expenses. This way, you can keep your privacy while managing your money with someone else. There is no one-size-fits-all solution. Using multiple accounts may be a great solution, especially for folks helping their children manage their money. This way, you can keep most of your funds separate while keeping an eye on the child’s spending habits. Similarly, if you are starting a business with a colleague, you may want one shared account for certain income and expenses, while the rest of your funds stay separate. See what works for you and the other person involved.

The Takeaway

Yes, you can open a bank account for someone else. However, they will usually have to be aware and participate in the account opening process. But, before you open an account on someone else’s behalf, make sure you understand the financial implication of this decision, such as forgoing your privacy. While the process is fairly straightforward, you do want to be sure the parties involved understand the ground rules and are comfortable with the shared access and responsibility.

Whichever path you take (shared or separate accounts), you can find top-notch banking options with SoFi Checking and Savings. We offer a super-competitive APY on accounts when you set up direct deposit, and we don’t charge you any of the usual fees. That means no monthly, no minimum-balance, and no overdraft (up to $50) fees. So your money earns more and doesn’t get whittled away by charges.

Ready for better banking? Sign up for a SoFi account today.


Can I open a bank account on behalf of someone else?

Yes, you can typically open an account for a minor or joint account holder. However, both parties will need to be present to open the account. It’s also possible to open an account on behalf of someone else if you’re their power of attorney.

What do I need when opening a bank account for someone else?

When opening a bank account for someone else, you and the other party must usually be present. You and the other applicant will also need to provide valid proof of identification, as well as personal information like your Social Security number and address.

Can I open a bank account for a younger sibling?

Yes, you can open a bank account for younger siblings as long as they are over 18 years old and participate in the opening process. If they are under 18, they may need a parent or legal guardian to open the account with them instead.

Photo credit: iStock/kate_sept2004

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