Custodial Brokerage Accounts

The term custodial account generally refers to a savings account at a financial institution mutual fund company or brokerage firm that an adult controls for a minor a person under the age of 18. Most commonly custodial accounts are held by parents but there s no limitation on who can act as the. What is a custodial account.

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It can be a great way to save on the child s behalf or to give a financial gift.

Custodial brokerage accounts. Apart from holding your stock in the cdp account you may have your stocks held with the brokerage that you use. Custodial brokerage accounts are accounts that a person sets up on behalf of a minor child. The schwab one custodial account is a brokerage account that allows you to make a financial gift to a minor and help teach them about investing. Open an e trade custodial account a brokerage account that a child can take over at 18 or 21.

It is a great way to protect and build a child s future. Etrade is the oldest online brokerage and its custodial accounts deserve consideration if you want to invest for your child s future. Once a child assumes ownership of his or her custodial brokerage account he or she can use the money for anything from educational expenses to a down payment on a home. In most cases it s a brokerage account or savings account that an adult controls for a child under the age of 18.

A custodial account allows adults to open an account for a minor with many options for investing the funds. Custodial brokerage accounts don t come with the same kinds of limitations as 529 accounts which can only be used to finance educational expenses. Note that all of the robo advisors are using custodian account for now. This means the stocks that you have purchased is held in custody.

A custodial account is really any type of financial account that one person opens and maintains for another person. It is set up and managed by an adult and turned over to the child when he or she reaches the age of majority. What is a custodian account. While stock and options trades cost 6 95 not the cheapest on this list account holders get access to 4 400 no load and no transaction fee mutual funds.

The money in this account belongs to the child. A fidelity custodial account sometimes called a utma ugma account is a brokerage account for investing in stocks bonds mutual funds and more. Custodial accounts can be opened at many financial institutions banks investment.