- Account ownership can transfer when customers reach the majority age (18-21, depending on the state), with new adult verification procedures.
- Texas uniquely allows minors to open accounts independently, though these contracts remain voidable if the minor chooses to cancel.
- Most other states maintain strict parental involvement requirements until the child reaches full legal majority age for binding financial contracts.
When I started working in compliance, I thought KYC for minors would just be regular KYC with smaller signatures.
It turns out there’s a lot more to it, and some pretty interesting reasons why.
The rules surrounding minor accounts in the US have evolved to strike a balance between financial inclusion and protection, and once you understand the ‘why’ behind them, they make a lot more sense.
Here’s what I’ve learned about how Minor KYC actually works and why these specific requirements exist.
What are KYC rules for Minors?
Minor KYC is the specialized customer verification process businesses must follow when collecting personal information or providing services to customers under 18. Unlike standard KYC, it requires additional layers of parental consent and guardian verification.
Under the Bank Secrecy Act, businesses must collect basic customer information from everyone – name, birth date, address, and ID numbers. This includes minors, but here’s the catch: kids can’t legally open accounts by themselves, which creates a compliance puzzle.
COPPA makes it even trickier. If you’re dealing with children under 13, you need documented parental approval before collecting any personal data.
So, before diving into penalties and costs, let’s break down exactly what documents you need and how the verification process actually works.
Required Documentation and Verification Process
Here’s what businesses actually need to collect when verifying minor customers – and it’s more complicated than just getting an ID.
💡 Note: Requirements vary significantly by state and local jurisdiction. These are general federal guidelines – always consult local regulations and legal counsel before implementing any minor verification procedures.
1. What You Need From The Guardian
You need a valid photo ID from both the adult and kid – a driver’s license, state ID, or passport all work. The adult goes through normal KYC stuff like any other customer.
Plus, you’ll want proof they actually live where they say – utility bills, tax documents, that kind of thing. And yes, you need photos for your records.
2. Proving The Kid Is Actually Their Kid
Birth certificates are your best friend here – they prove the kid’s age AND that this adult is actually responsible for them. Without this, you’re basically taking someone’s word that they can make financial decisions for a minor.
School IDs might work as a backup, but most compliance teams stick with birth certificates because they’re harder to fake.
3. How Much Control The Kid Gets (By Age)
Your documentation changes based on who’s actually running the account:
- Under 10: The parent handles everything
- 10-15: The kid can use the account, but the parent stays involved
- 16+: Some places let them go solo
4. When They Turn 18
Everything changes when they hit legal age (18-21, depending on where you are). Now you’re dealing with a real adult customer and need to reverify everything.
Business Implementation Costs and Technology Solutions
Minor KYC hits businesses with costs they don’t see coming. You’re not just verifying one person – you’re handling two people, managing parental permissions, and dealing with age-specific rules that regular KYC systems can’t handle.
Most businesses find out the hard way that their current compliance setup doesn’t work for minors. You need dual verification workflows, parent approval systems, and methods for transitioning accounts when children turn 18. Companies often end up patching together multiple tools or paying for expensive custom development just to make it work.
The real pain comes from coordination – getting documents from teenagers AND their parents, managing ongoing oversight, and keeping everything compliant as regulations change. It’s why many businesses just avoid the minor market altogether.
Automating Minor KYC With Technology
Signzy’s complete KYC automation platform eliminates these implementation headaches through a single integrated system designed specifically for complex verification scenarios. Our solution manages dual-party verification workflows, automates guardian consent processes, and maintains compliance across all age categories.
With built-in document verification, biometric authentication, and automated compliance reporting, businesses can simplify operations while enhancing the customer experience. The platform’s age-based permission controls and parental oversight features eliminate the need for expensive custom integrations or manual workarounds.
Want to see how it works with your specific use case? Book a quick demo to walk through the minor verification process.
FAQs
Do I need to verify the identities of both the minor and the parent?
Federal guidance remains unclear on this critical question, but most institutions verify both parties as a best practice. This dual verification ensures compliance with Bank Secrecy Act requirements while establishing proper guardian authority for legal decision-making on behalf of the minor.
What is the minimum age for a minor to open a bank account?
Most states require an age of 18 for completely independent accounts, though the requirements vary significantly. Some institutions allow sole ownership to begin at 16, while others maintain parental involvement until the full majority age, depending on state regulations and institutional policies.
What documents do I need from the parent or guardian?
Standard adult KYC requirements apply: a valid photo ID (driver’s license, state ID, or passport), current proof of address (such as utility bills or tax documents), and photographs for account records. The guardian undergoes the same verification process as any adult customer opening their account.
How do I prove the adult is the child's guardian?
Birth certificates are the gold standard – they simultaneously verify the minor’s age and establish the legal relationship between guardian and child. Court documents are typically used for legal guardians, while adoption papers may be required for non-biological parents in certain jurisdictions.
Does the Children's Online Privacy Protection Act (COPPA) apply to all businesses that deal with minors?
COPPA specifically targets businesses collecting personal information from children under 13, requiring documented parental consent before any data collection. Financial services, gaming platforms, educational technology, and e-commerce sites commonly fall under these requirements when serving younger children.
