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Written by Sam Pennington on October 19, 2023
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8 Best Brokerages For Custodial Accounts In 2024

One of the best investments a parent can make for their child’s future is opening a custodial brokerage account.

Sure, you can spend your money on birthday and holiday gifts your child will temporarily enjoy, then get bored with. But custodial accounts continue to rise in value, unlike toys kids outgrow.

Unlike a savings account, brokerage custodial accounts can benefit from the wealth-generating potential of the stock market.

Here is our list of some of the best brokerages that offer custodial accounts in 2023.

Learn More: Robinhood Retirement 3% Match

Robinhood is a popular "all-in-one" investing app.

While they are most well-known for their commission free stock trading, they've recently shaken up the Retirement Investing World too.

Introducing Robinhood Retirement; home of the biggest IRA match on the market.

Robinhood IRA Boost

Here's what you need to know:

  • Robinhood offers 2 types of retirement accounts - the Roth IRA and Traditional IRA
  • All Robinhood investors will get a 1% Match on what they Contribute or Transfer
  • Robinhood Gold members will get a 3% Match - the biggest on the market

And don't worry, this comes with a Portfolio Builder Tool. You don't have to construct your investment portfolio from scratch if you don't want to.

Lastly, you'll even get a free stock worth up to $200 when you open a new Robinhood account using our link.

Best Free Stock Promotions

BrokeragePromotionLink
Robinhood Logo1 Free Fractional Share Worth $5 To $200Learn More
Webull LogoEarn Up To 75 Free Fractional SharesLearn More
Moomoo Logo5 Free Stocks When You Deposit $100+Learn More
Acorns Logo$20 Bonus When You Invest $5+Learn More

What Is A Custodial Brokerage Account?

This type of account lets an adult, such as a parent, grandparent, or family friend invest money on behalf of the child.

Keep in mind that all assets in a custodial account are considered irrevocable gifts and are held in the child’s name. You will not have the power to change the child who benefits from the account once it is set up.

  • The account must be transferred to the minor when he or she reaches age 18 or 21.
  • Depending on the state you live in, this age can be up to 25.

Your goal is most likely to provide financing for college tuition or other higher education costs.

But keep in mind that once this account is transferred, the young adult can use the money in any way they choose, such as a new car or home.

1. M1 Finance

M1 Finance makes it easy to build and maintain a well-balanced and diversified portfolio through the use of "investment pies".

Instead of buying individual shares of stock and needing to manually balance your portfolio, you're able to set a target allocation for your portfolio and M1 handles the rest.

So if you want your child's portfolio to consist of 10% of 10 different stocks/ETFs, you're able to set this up once and let it run on autopilot as you contribute more.

Your investment pie can consist of a variety of stocks and ETFs.

Currently, only M1 Plus users are able to take advantage of the M1 Finance custodial account.

This subscription comes at a cost of $125 per year and includes a variety of other benefits.

2. Interactive Brokers

interactive broker logo

Interactive Brokers, or IBKR, is a popular investing platform that caters to both experienced traders and beginners.

Introduced in 2019, IBKR Lite is a user-friendly option tailored for casual investors. This service allows users to make unlimited, commission-free trades of U.S.-listed stocks and exchange-traded funds.

Interactive Brokers offers custodial accounts for minors.

3. Firstrade

firstrade review

Firstrade's custodial account doesn't have contribution limits, custodian income limits or minimum deposit requirements.

You can withdraw the money for any purpose without time restrictions, as long as it is for the benefit of the minor.

You can invest in stocks, bonds, mutual funds and ETFs.

Accounts are held under the minor's name and social security number and there can only be one custodian per account.

Open A Firstrade Account Here!

4. Charles Schwab

charles schwab logo

A Schwab One Custodial Account brings lots of advantages for you and your child.

You'll get:

  • No limits on how much you can add
  • Tax-free status for the first $2,500 of your child's earnings
  • No gift tax for yearly contributions up to $17,000 per kid
  • The account will be in your child's name

With Schwab One, you can invest in stocks, funds, and more for your child's future needs, with expert guidance and research to help you make the most of it.

5. Vanguard

vanguard review vs betterment vs personal capital

When choosing a custodial brokerage account, you should consider Vanguard's UGMA/UTMA.

They offer a variety of investment options, no fees for managing the account on your own, and easy ways to move money into and out of the account.

6. E*TRADE

E*TRADE's Custodial Account is like a savings plan for kids. It helps grown-ups look after a kid's money until they're old enough.

Parents or chosen guardians can look after the account. You can put in as much money as you want, and there's no limit on how much you can earn.

You can easily use the money with a special card and checking account.

7. Ally Invest

ally invest logo

A custodial brokerage account is like a savings account for kids managed by grown-ups, such as parents or grandparents. It lets them invest money for the child's future.

These accounts work just like regular ones and can include various investment options.

You can get a custodial account at Ally Invest.

8. Fidelity Youth Account

fidelity-logo-PNG

Fidelity Youth™ is a free app for teens aged 13-17. It helps teens handle their money, and parents can stay in the loop.

With this app, teens can manage and invest their own money. They also get a special debit card that gives them 5 cents back for each use, and they won't be charged any ATM fees within the US.

Plus, there are no extra fees for having the account, no matter how much money they have.

 

Article written by Sam Pennington
Sam is a personal finance writer. While in college, he dedicated his spare time to learning about personal finance, investing, and real estate. Sam currently works as a business analyst for one of the top food manufacturers in the world.

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
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M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
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