There's a bill right now that is pushing for a Roth for minors, which would be ideal. At this time, IRA contributions must come from earned income, with the exception of the spouse. That means that many minors cannot contribute, and you can't fund one for them. If the bill passes, that changes.
Until that passes (if it does) your options are guardian accounts. For regular banking/savings you should be able to create co-signed/dual accounts. For broader assets you may need to look at UGMA and UTMA accounts. These two account types are both custodial accounts, where someone manages the money for the child until they come of age, and then the child takes decision making power.
Note that the gifts are irrevocable.
- UTMA allow more complex assets (including real estate) to be owned.
- UGMA age of majority is 18, UTMA can be up to 25.
Important considerations
- You can't tell the kid what to do with the cash - when they hit age of majority it is for them to decide. It means that they may spend it on whatever they wish once of age.
- The funds if invested will create 'unearned income' this triggers the Kiddie Tax once the level reaches a certain point. First $1050 is exempt, the second $1050 is taxed at child rate (10%) and any more than this is charged at the parents rate.
- Both accounts are considered assets in the name of the child for FinAid - this will really make a difference to their ability to claim a needs based grant or scholarship. Child owned assets are much more aggressively weighted compared to parental assets.
Note, your Roth is passable to the child (in custody) via inheritance. Currently you can pass up to $5.43M per parent (so over 10M USD if married or a widow/er) without federal tax. So if you are thinking about wealth transfer then this may be better, since it avoids the risk that the child goes nuts with the cash, or if they are good at saving it, that it negatively impacts their FinAid. The parental Roth should be excluded from FinAid FAFSA and I
believe most CSS profiles, so a better place to have your wealth.
A 529 plan may be an option, but that does focus the assets on being used for college. A 529 is counted as a Parental Asset rather than a Student Asset, which is more favorable per the above.