Does it matter whose bank is linked to custodial Roth IRA?

[jyeh74]

The brokerage firm tells me it doesn’t matter. It could be the parents bank account that’s linked to the custodial Roth IRA or could be a child’s bank account that is linked to the custodial Roth IRA. As long as the money is funded and documented you’re OK. Are there certain rules as to which bank account is linked?

[macuser_22]

What do you mean "linked".

A custodial IRA is an IRA for a minor child under age 18 who has earned income that qualifies for an IRA contribution and is in the child's name with an adult as custodian to control the account until the child becomes an adult.

Any bank or financial institution can set up a custodial account.

What exactally are you asking?

[jyeh74]

@macuser_22  Once custodial Roth IRA is set up at the brokerage firm for the child, you can set up a bank account to link to it.  That way, you can transfer money into it.  For example, let’s say the child earns $6000 a year.  To transfer $6000 into the custodial Roth IRA, do you set up the parents bank account to transfer the funds or do you set up the child’s bank account to transfer the funds. People said it doesn’t really matter.

[macuser_22]

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@jyeh74 wrote:

@macuser_22  Once custodial Roth IRA is set up at the brokerage firm for the child, you can set up a bank account to link to it.  That way, you can transfer money into it.  For example, let’s say the child earns $6000 a year.  To transfer $6000 into the custodial Roth IRA, do you set up the parents bank account to transfer the funds or do you set up the child’s bank account to transfer the funds. People said it doesn’t really matter.

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That has nothing to do with taxes whatsoever.    That is simply the policies of the financial institutions.

[jyeh74]

@macuser_22 @So technically does it matter whose bank account is set up to the custodial Roth IRA for electronic transfers?  
I believe you said the child’s account from your other thread.  I don’t think it matters.  Someone else please chime in.

[macuser_22]

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@jyeh74 wrote:

@macuser_22 @So technically does it matter whose bank account is set up to the custodial Roth IRA for electronic transfers?  
I believe you said the child’s account from your other thread.  I don’t think it matters.  Someone else please chime in.

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Electronic transfers or how the money gets into the child's IRA is irreverent.     Whether you take a check to the bank, transfer the money or any other method is irreverent as long as the IRA is in an account in the child's name with you (or another adult) as custodian and the money deposited into the child IRA is money that the *child* earned from working.

[macuser_22]

And please keep your question in one thread - asking the same question in many threads is confusing.

[jyeh74]

Ok thanks for confirming.  The custodial Roth IRA is in the child’s name.  I didn’t think it mattered how money is deposited.  Cash or check or from parent’s electronic bank transfer.  Or from child’s electronic bank transfer.  Annual limit is $6000 per year per child.