Child Investment Plans to Explore

It aims to provide parents and grandparents like you with the latest options available. You can drill into which investments work best for your child’s needs based on their unique situation.

- Build an understanding of money, its worth and how to earn it. - Begin investing in your children’s future and showing them how to participate. - Teach kids how to combine these skills to build a career and invest their earnings toward a secure financial future.

How to Invest for Your Kids and Teach Them Self-Sufficiency

1

The Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA), also known as custodial accounts, allow you to put investments in a special account for a minor child or grandchild.

Custodial Accounts

2

A 529 plan is a special tax-advantaged investment plan that lets families save for the current and future costs of schooling for a beneficiary. 529 Plans come in two types:

529 Plans

College Savings Plans work similar to traditional 401(k)s and IRAs. Contributions you make get invested into mutual funds or other investment vehicles like age-based investments called target date funds.

College Savings Plans

While they are not available in every state, there is a way for parents of college-bound children to save money on their tuition. By investing today’s tuition rates into a prepaid plan, kids can lock that price for the next 18 years and avoid paying increases over time.

Prepaid Tuition Plans

3

An Individual Retirement Account, or IRA, is a tax-advantaged savings account where you keep investments such as stocks, ETFs, bonds and other asset types. These accounts typically start with young adults because they require the account owner to have earned income.

Traditional and Roth IRAs

If your child is a minor (under 18 or 21 years old, depending on your state of residence), you will find many of the best stock investing apps for beginners will let you set up a custodial IRA.

How to Open a Custodial IRA for Your Child

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