Investment Accounts for Kids  [Custodial Brokerage Accounts]

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.

What is a Custodial Account?

Custodial brokerage accounts are financial accounts held in the name of a minor by one or more custodians.

What is a Custodial Brokerage 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.

What Types of Custodial Accounts Are There?

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.

→ UGMA (Uniform Gifts to Minors Act) Accounts

Set up by parents or other custodians and are not limited to a certain dollar amount each year.

→ UTMA (Uniform Transfer to Minors Act) Accounts

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.

What is a Custodial Account for Stocks?

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