The Greatest Custodial Accounts of March 2023

Our specialists select the very best services and products to assist make sensible selections along with your cash (here is how). In some instances, we obtain a fee from our companions; nonetheless, our opinions are our personal. Phrases apply to provides listed on this web page.

If you purchase by way of our hyperlinks, Insider might earn an affiliate fee. Study extra.

Custodial accounts, also referred to as UGMA/UTMA accounts, are brokerage accounts that enable dad and mom or guardians to take a position on behalf of their kids or dependents. Possession of those accounts transfers to the minors as soon as they attain authorized age (sometimes 18 or 21, relying on the state). Many brokerages additionally provide different custodial choices like 529 plans, IRAs, and trusts.

The Greatest Custodial Accounts of 2023

These accounts additionally provide a number of tax perks. Preserve studying to see which custodial account is finest for you.

The Greatest Custodial Accounts

Methodology: How We Selected the Greatest Custodial Accounts

We reviewed greater than a dozen custodial accounts to search out the very best choices for lowest charges, ease-of-use, versatile funding selections, and customer support availability. We additionally sifted by way of a number of funding platforms to search out the very best choices each for self-directed merchants and hands-off traders.

You may discover that lots of the platforms talked about in our information provide the choice to each commerce by yourself or automate your custodial account’s investments.

See our full methodology for ranking investing merchandise »

Custodial Accounts Often Requested Questions

Greatest for All Varieties of Buyers

Charles Schwab

Generally known as the Schwab One Custodial Account, this account provides traders a number of perks. These embrace a $0 minimal opening deposit, $0 account setup and upkeep charges, and commission-free shares and ETFs. As well as, you possibly can spend money on mutual funds and different securities and make the most of funding analysis and different instruments.

With Schwab Inventory Slices, you possibly can spend money on fractional shares so long as you meet the $5 minimal requirement. And as with all custodial accounts, will not have to fret about any contribution limits. Mother and father and guardians may additionally contemplate Schwab’s custodial IRAs (you possibly can open these as a conventional or Roth IRA), 529 faculty financial savings plans, and training financial savings account (ESA).

One other benefit of Schwab’s custodial account is that it’s not only for self-directed traders. You may automate your investments by establishing the account by way of the Schwab Clever Portfolios or Schwab Clever Portfolios Premium robo-advisors. Simply notice that you’re going to want a minimal of $5,000 for the previous and not less than $25,000 for the latter.

As soon as the account beneficiary reaches authorized age, they’re going to retain full possession of the account’s earnings and may then make the most of further Schwab merchandise if that’s the case desired.

What to look out for: For those who resolve to take the automated investing route to your custodial account, you may want not less than $5,000 for Schwab Clever Portfolios and $25,000 for Schwab Clever Portfolios Premium.

Charles Schwab Brokerage Account Assessment

Greatest for Financial institution of America Shoppers

Merrill Edge funding account

Merrill Edge allows you to make investments to your minor with out operating into any minimal opening deposits, annual charges, or account upkeep charges. Merrill Edge additionally provides commission-free shares, ETFs, and choices. And you’ll select the robo-advisor route with Merrill Guided Investing or Merrill Guided Investing with an Advisor.

For those who’re already a Financial institution of America consumer, you possibly can fund the account by linking your current Financial institution of America account. Plus, Merrill Edge permits for checks, wire transfers, and transfers or rollovers from current accounts.

Along with its custodial accounts, Merrill Edge provides an enormous vary of different aggressive merchandise, together with automated investing accounts (robo-advisors), IRAs, 529 plans, retirement calculators, margin accounts, and extra.

Merrill Edge additionally provides 24/7 cellphone assist and reside chat.

What to look out for: Annual charges for Merrill Edge’s automated accounts — Merrill Guided Investing and Merrill Guided Investing with an Advisor — are on the upper aspect. You may incur a 0.45% charge for the previous and a 0.85% charge for the latter.

Merrill Edge Investing Assessment

Greatest for Mutual Funds

Vanguard

A behemoth within the retirement investing and mutual funds house, Vanguard additionally provides some aggressive options with its custodial accounts. There are not any opening deposit, upkeep, or account switch charges, and you may automate transfers from each your checking account and different Vanguard accounts.

Vanguard permits for investments in shares, bonds, Vanguard mutual funds, non-Vanguard funds, and extra. Plus, with Vanguard Private Advisor Companies, you possibly can skip out on the self-directed investing route and benefit from robo-advice paired with ongoing monetary advisor steering. Notice, nonetheless, that you’re going to want not less than $50,000 to get began with this service, and you will be accountable for a 0.30% annual charge.

Vanguard’s suite of funding merchandise additionally options 529 faculty financial savings plans and trusts. And if you happen to’re trying to deepen your investing data earlier than and/or after you arrange a custodial account, the brokerage provides an in depth collection of assets (investing instruments and calculators, market information and views, and academic guides) that can assist you accomplish that.

What to look out for: Vanguard would not presently provide fractional shares, and choices contracts will price you $1 (many brokerages cost $0.65 per contract).

Vanguard Brokerage Account Assessment

Greatest for Low Charges

Constancy

Constancy’s custodial account allows you to construct wealth by way of shares, ETFs, choices, bonds, mutual funds, and way more. Plus, the account has no minimal opening necessities or charges, and any shares, ETFs, or choices the account holder invests in are commission-free.

Its custodial choices are additionally supplemented with account perks like Constancy Viewpoints, a web-based middle with professional commentary on investing methods, markets, and way more. As well as, Constancy’s Planning & Steering Heart provides instruments that can assist you meet investing objectives.

Constancy provides a number of different minor funding account choices past UGMA/UTMA custodial accounts. These embrace its Roth IRA for Children account, 529 plan, Constancy Youth Account (this account lets kids between the ages of 13 and 17 make investments on their very own), and belief accounts.

What to look out for: Constancy’s automated investing accounts — Constancy Go and Constancy Personalised Planning & Recommendation — do not assist custodial accounts.

Constancy Investments Assessment

Greatest for Energetic Merchants

TD Ameritrade funding account

TD Ameritrade provides an enormous vary of accounts for youth. These embrace its UGMA/UTMA accounts, Coverdell Schooling Financial savings accounts, and 529 plans (TD Ameritrade is now not providing 529 plans to new shoppers).

And like the entire different brokerages listed above, you will not have to fret about minimal deposits to get began. TD Ameritrade additionally provides a aggressive funding choice. It provides you entry to commission-free shares and ETFs, and it gives greater than 13,000 mutual funds. 

For those who’re a hands-off investor and would reasonably depart the day-to-day buying and selling selections to the professionals, you may need to arrange an account by way of Charles Schwab. TD Ameritrade is now not accepting new shoppers for any of its managed portfolios, however you possibly can nonetheless open an automatic investing account by way of Schwab Clever Portfolios or Schwab Clever Portfolios Premium.

What to look out for: Schwab acquired TD Ameritrade, so lots of the brokerage’s choices have merged with Schwab’s. Nevertheless, each platforms nonetheless provide standalone merchandise, so you should definitely hold this in thoughts as you weigh completely different account choices.

TD Ameritrade Brokerage Assessment

Greatest for Automated Investing

E*Commerce

E*TRADE provides account choices for every type of traders, but it surely gives a very aggressive suite of custodial merchandise. These embrace its commonplace UGMA/UTMA custodial account, IRA for Minors, and Coverdell ESA accounts. Its commonplace custodial account comes permits for commission-free shares, ETFs, and choices.

Nevertheless, you may pay $1 per bond, and bond minimums can vary from $10 to $250. Charges for funds range, however E*TRADE presently provides greater than 4,500 no-load, no-transaction-fee mutual funds. And those that choose robo-advice can construct wealth by way of its expert-managed automated investing account,Core Portfolios (notice that you’re going to want not less than $500 to arrange this account).

Its custodial accounts additionally haven’t any earnings or contribution limits, they usually include a free debit card, checking perks, and on-line invoice pay. 

What to look out for: E*TRADE would not provide fractional share buying and selling.

E*TRADE Investing Assessment

Different Custodial Accounts We Thought-about

• Acorns: Acorns invests your cash into a personalised portfolio of ETFs, so you do not have to fret in regards to the buying and selling selections in your account. One draw back, nonetheless, is that you’re going to pay a $5 month-to-month charge for custodial accounts.
• Ally Make investments: Ally Make investments provides an enormous assortment of funding merchandise, and it provides you the choice to arrange a self-directed custodial account or automated custodial account. One factor to think about, nonetheless, is that the platform would not provide any no-transaction-fee mutual funds.
• Firstrade: Firstrade gives commission-free buying and selling for shares, ETFs, choices, and mutual funds. The platform additionally provides worldwide investing accounts, but it surely would not present any managed accounts or automated investing choices.
• Constancy Youth account: Launched in 2021, the Constancy Youth account locations the facility within the minors’ arms. The account permits teenagers between the ages of 13 and 17 to take a position on their very own, so it is not precisely a conventional custodial account. However like the usual UGMA/UTMA accounts, the Youth Account merely turns into an everyday Constancy brokerage account as soon as the kid reaches age 18.
• M1 Finance: Providing a mixture of self-directed buying and selling and automatic investing for shares and ETFs, M1 Finance is a aggressive platform within the on-line brokerage house. Nevertheless, solely M1 Plus members get entry to custodial accounts, and the M1 Plus subscription prices $125 per yr.
• Stash: Stash provides traders entry to automated investing (for each shares and ETFs), round-ups, banking, and extra. The platform additionally provides retirement portfolios and household monetary recommendation packages. One draw back to think about, although, is that you’re going to pay a $9 month-to-month charge — by way of the Stash+ plan — to make the most of a custodial account.
• Stockpile This funding platform is a good wealth-building possibility for youths and teenagers. It provides no minimums, no recurring charges, and no present card or funding charges (you should buy present playing cards which are redeemable for various shares in your youngster or dependent’s account). One draw back is that, whereas Stockpile provides hundreds of shares, it solely provides two account varieties: particular person accounts and custodial accounts.
• Beloved: Beloved is a monetary training app providing funding accounts and monetary literacy assets for fogeys who wish to get their children (or different dependents) into investing at an early age. It allows you to spend money on themes, objectives, and corporations that align along with your preferences, and you may arrange custodial accounts. Nevertheless, it will not be the only option for many who desire a wider vary of account varieties and funding selections.