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

Forum|Forum|5 years ago
March 9, 2021
1 reply
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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

Alumni - Champ

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?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

jyeh74Author

Level 6

@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

Alumni - Champ

@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.

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

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**