Fidelity has just unveiled the first of its kind Youth Investing Account, giving teens aged 13 to 17 a way to learn how to spend, save, and invest all in a single account.
These younger teens can trade most US stocks, ETFs, and Fidelity mutual funds in their own accounts. Once the teen opens the Youth Account, they will get a free debit card with no account fees or minimums.
The Youth Account has no subscription fees, no account fees, no minimum balances, and no domestic ATM fees.
The teen is the owner of and has control over the account. They are the sole decision-maker, not the teen's parent or guardian. It is not a joint account or a custodial account.
However, there is one caveat: A parent/guardian must have an existing Fidelity account.
The parent with the existing Fidelity account can work with their teen to answer a few simple questions, provide an image of their Social Security card, plus one additional form of ID.
Once the teen's application and documentation have been reviewed and verified by Fidelity, the teen will receive a notification with instructions to activate their account and download the Fidelity Mobile App to log in.
The account can quickly and easily be funded through mobile check deposit, bank transfer, Fidelity’s payment app, and more.
There is no minimum balance requirement. However, Fidelity experts suggest that deposits be limited to no more than $30,000 per calendar year. Fidelity will monitor account deposits and reserve the right to restrict additional deposits and trading capabilities if annual activity exceeds this limit.
The Youth Account allows the teen to buy and sell only certain securities that are publicly traded in the United States.
Teens can manage their debit card online. The service is available for card activation, viewing card limits, managing PINs, locking and unlocking the card, replacing the card if lost, stolen, or damaged, and managing travel preferences. Debit card usage alerts for debit transaction notifications are also available. However, these must be set up in the Alert Center on Fidelity.com.
A parent/guardian is expected to provide supervision and oversight for their teen's actions. In any instances of expected fraudulent activity on the account, the parent/guardian will be the main point of contact.
The parent or guardian must also:
Once the teen reaches the age of maturity (currently 18 in most states), the account is eligible to transition to a standard brokerage account. The teen will be prompted to transition their account starting on their 18th birthday. This can be done to transfer assets to a different account or generate a new account number and login credentials.
The teen, as the account owner, will need to agree to a new set of Fidelity documents, including a new account agreement. Once the teen's account transitions, they will also be upgraded to a new brokerage debit card, which will be reflected on the debit card page.
There is also a dedicated Youth Learning Center with materials developed specifically to help teens develop good financial habits, such as sticking to a budget and paying with cash rather than buying on credit.
In its history of nearly 75 years in the investment and financial advice arena, Fidelity continues to dominate the market, rolling out new services continuously. It also has an impressive number of team members to serve investors. Fidelity employs more than 40,000 associates who are focused on the long-term success of people like you.
Fidelity has earned some of the industry’s highest accolades. Fidelity was just rated Best Online Broker in 2020 by Barron's and Investor's Business Daily. It was also named #1 for Order Execution and #1 for Research by StockBrokers.com in 2020. Keep in mind, this is an extremely competitive field, so taking home these awards is no small feat!
Fidelity has a long list of positive attributes, including:
Fidelity’s brand new program gives teens aged 13 to 17 a way to learn how to spend, save, and invest all in a single account. The new Youth Accounts have no subscription fees, no account fees, no minimum balances, and no domestic ATM fees.
What’s truly ground-breaking here is that the teen is the owner of and has control over the account. They are the sole decision-maker, not the teen's parent or guardian. This gives the teenagers a way to ease into investing, and that’s a positive move.