Online investing apps allow you to set up individual brokerage accounts. These are accounts under one person’s name used to buy and sell stocks, bonds, exchange traded funds, and other types of investments.
Some however, let you open joint brokerage accounts. This account gives two or more people equal ownership. Joint accounts are typically common for couples, parents and their children (over 18 years old), and adults caring for aging parents.
Joint accounts let multiple people have control over the investment account. Individuals can perform trades, deposits, withdrawals, and engage in other activities related to their investments.
At this time, Robinhood does not give investors the option of opening a Joint Account, although the info on their website states they hope to do this soon. However, Betterment offers joint accounts and may be a good option for you.
If you transfer an existing brokerage account to Robinhood through December 8th, 2023, you can get an Unlimited 1% Transfer Bonus.
For example, if you transferred a brokerage account worth $50,000 - that would be a bonus of $500.
In addition, Robinhood offers a free stock for new users as well as a 1% IRA match for retirement accounts.
A custodial account lets an adult, such as a parent, grandparent, other relative, or family friend invest money on behalf of a child. This means that while the child owns the assets contained in the account, the adult makes all of the investment decisions.
The account must be transferred to the minor when he or she reaches age 18 or 21. Depending on the state in which you live, this age can be up to 25.
There are significant tax benefits that you will want to consider. These accounts let you keep investing money on behalf of a child, without you holding legal ownership of those assets. That is a huge benefit for income tax purposes.
Unearned income in a custodial account will be taxed to the child rather than to the adult overseeing the account. Most children have little or no earned income. This places them in a much lower tax bracket than the adult, which can mean lower tax bills or even no tax liability at all.
Many of today’s brokerage platforms help adults invest on behalf of the minor with a custodial account and build a diverse portfolio in a wide array of assets, including a combination of stocks, mutual funds, bonds and ETFs.
Since Robinhood does not offer custodial accounts, you may wish to take a look at M1 Finance instead.
You can also open an M1 Finance custodial account if you are an M1 Plus member.
This premium level carries a $125 annual fee, and offers the following:
M1 custodial accounts work like your regular M1 Invest account: build your pie, invest in it automatically, and watch it grow.
M1 lets you withdraw custodial account funds anytime for things that benefit the child, like buying their first car, paying for higher education, renting their first apartment, and more. Once the child reaches adulthood, they take over control of the account and can make withdrawals as they choose.
In order to stay competitive, today’s online investing apps are working hard to offer a wide variety of financial products including joint and custodial accounts.
However, you will not find either of these accounts on Robinhood.
Don't forget to grab your free stock worth up to $200 from Robinhood today!