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Are UMTA Account's Only Savings Accounts?

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Are UMTA account's only savings accounts? Why?

No. The model version of the UTMA does not contain any restriction on investments, particularly bank deposits.

Some banks do not allow these accounts to be set up in accounts subject to check; e.g. DDA or MMDA accounts, because they regard it as being inconsistent with the purpose of the account. They also refuse to allow debit cards on savings accounts for UTMAs.

It may seem a little paternalistic, but it's probably born of experience. Sometimes adults open these accounts as a sham for either a) avoiding income taxes (they think) or b) avoiding creditors, or c) having access to a checking account when they would not meet the bank's standards using their own name.

First published on 1/30/12

First published on 01/30/2012

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