Investing in your children’s future is a smart move. Not only will you be helping them, you will also secure your own financial stability for when they go to college, get married or need help with a down payment on a house.
Custodial accounts allow a custodian, typically a parent or guardian, to have an account held with a financial institution that holds assets for the benefit of the named minor on the account.
Typically set up by parents, guardians, grandparents or other relatives, who then serve as custodian for the child’s account until reaching the age of termination or majority in their particular state.
Custodial accounts allow you to invest in stocks, bonds, exchange-traded funds (ETFs) and mutual funds, but not riskier assets like stock options or choosing to buy on margin.