Best Custodial Accounts:  How to Start Investing for Kids [2022]

A child’s custodial account can teach them about investing – a laudable goal – but they also count toward the FAFSA and affect potential financial aid your child receives for college.

Custodial accounts are typically used to save and invest for a minor in hopes that they will be able to use their funds in a more productive way when they reach adulthood.

What is a Custodial Account?

Both UGMA and UTMA accounts are similar in that they are custodial accounts with assets held within them for the benefit of the minor. Where they differ are the types of assets that can be held within each.

What is the Difference Between an UGMA and UTMA Account?

A custodial account works by having a parent, guardian or other custodian establish an account with a bank or broker offering these accounts. The custodian makes or accepts contributions into the account and manages the underlying assets the funds invest in for the beneficiary.

How Does a Custodial Account Work?

Now that we know a lot more about custodial accounts, it’s time to answer the question of where to open your custodial account. You’ll have no shortage of options available to you when deciding where to open an account, but you’ll likely want one with the ability to invest.

What is the Best Custodial Account (UGMA/UTMA) for Kids?


Acorns offers a custodial brokerage account for parents interested in opening an investment account for their child called Acorns Early.

Acorns Early  ($10 Bonus)


It’s easy to use and can double as a savings account for your teens. The app will teach you the basics of investing, how to invest in stocks and ETFs, etc. It works best if parents are involved in the process because it requires linked accounts from the custodians’ banks or brokerages.

Greenlight App


M1 Finance is an all-in-one personal finance solution that allows new investors to set up an account in seconds. If you want to use this as a kids investing app, you’ll need to apply for an M1 Plus subscription. The company has a limited time offer of the first year for free ($125 value).

M1 Finance  ($30 bonus)


EarlyBird is a mobile app which allows parents and guardians to set up a UGMA account to gift money for investments to their children.

EarlyBird  ($10 Bonus)

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