Finest Custodial Funding Accounts In 2026

Mother and father and grandparents are more and more turning to custodial funding accounts to present youngsters an early monetary begin. These accounts (formally referred to as UGMA or UTMA accounts) let adults make investments cash on a baby’s behalf till they attain maturity.

Not like traditional savings accounts, custodial accounts can maintain shares, ETFs, and mutual funds, giving younger buyers the prospect to learn from long-term market development. However each platform has completely different charges, options, and switch guidelines, and selecting the flawed one can create sudden tax or financial-aid penalties later.

We reviewed and examined the preferred custodial funding accounts out there in 2026, evaluating every on prices, usability, and suppleness. Whether or not you’re saving birthday cash, investing an inheritance, or teaching your child about stocks, right here’s what to know earlier than you open a UTMA or UGMA account and which suppliers stand out.

At A Look:

• Finest General: Charles Schwab
• Finest For Teenagers: Fidelity Youth
• Finest For Custodial Roth IRA: FutureMoney

Finest Brokerages For Custodial Funding Accounts

Our high decisions for custodial brokerages is similar to our record of best brokerages overall.

These brokerages function easy-to-set-up accounts, helpful account reporting, and no-cost trades for shares, ETFs, and mutual funds. Most additionally robotically enroll customers in Dividend Reinvestment Applications, so all of your cash stays invested.

Charles Schwab

This custodial account from Charles Schwab presents $0 minimums, and $0 trades. And if you have already got your individual Schwab accounts you may handle the custodial account from the identical dashboard. 

However the place Schwab maybe finest stands out is that it presents “Clever Portfolios” (robo-advisor portfolios) that include no advisory charge. These portfolios are monitored each day and robotically rebalanced as wanted.

You may want to take a position at the very least $5,000 in a minor’s custodial account earlier than it could actually develop into eligible to make use of the Clever Portfolios service. However when you attain that mark, it is an extremely low-cost solution to create a diversified and automatically-managed portfolio of ETFs on your little one or grandchild.

Constancy Youth Account

The Fidelity Youth™ Account is a teen saving, investing, and spending account. It is an easy-to-use account on your teen, the place you may make investments with no month-to-month charges or account minimums!

Teenagers can spend money on shares for as little as $1 with fractional shares. Your teen can study to avoid wasting and spend smarter with their very own debit card with no home ATM charges. And youths can hyperlink their account to frequent fee apps like Venmo and PayPal. Plus, dad and mom can arrange alerts and monitor their teen’s account exercise on-line, and thru statements, commerce confirmations and debit card transactions.

FutureMoney

FutureMoney presents a straightforward means for fogeys to assist their youngsters make investments their financial savings. Mother and father can do that by organising common recurring deposits and letting their youngsters make investments the funds.

The Junior Roth IRA is the first funding car FutureMoney presents. It isn’t straight precise Roth IRA (however it may be – the app helps stroll you thru it). As an alternative, it makes use of a 529 Plan that may be rolled over right into a Roth IRA after 15 years.
Mother and father and children can contribute as much as $35,000 per little one per yr. These funds develop tax-free and might develop into the inspiration for future retirement financial savings.

The platform presents totally managed portfolios. You may select a portfolio primarily based in your financial goals or necessary points like local weather change or combating poverty.

Vanguard

You may be hard-pressed to discover a brokerage that provides extra low-cost index funds than Vanguard. The agency additionally has probably the greatest menus of target-date funds, which might be a good way to take a position cash in a custodial funding account that you simply hope they’re going to use at a particular time (like once they enroll in school).

As with the entire brokers on this record, Vanguard costs no commissions on inventory or ETFs. Its in-house mutual funds commerce free too. There are not any enrollment charges for opening a Vanguard UGMA/UTMA account both.

Apps To Set Up Custodial Funding Accounts

For those who don’t have a big sum to take a position, however you wish to get began an app could also be a sensible choice for you. These apps assist customers to take a position small sums of cash, to assist their portfolios develop over time. They may also be helpful instruments to assist educate youngsters about cash.

Greenlight

Greenlight is a debit card and investing app for teenagers and their dad and mom. It is most likely one of the crucial well-known starter checking account choices for households, nevertheless it additionally embrace an funding account.

Greenlight permits youngsters to buy fractional shares of shares and ETFs (as little as $1) with no buying and selling charges. 

The draw back of Greenlight is the pricing – beginning at $10.98/mo to unlock investing options.

Cloth UGMA

Fabric is historically identified for its life insurance coverage merchandise, nevertheless it not too long ago launched a UGMA account that is an excellent different to a 529 plan. This account lets you save in a taxable account on your youngsters’s futures.

This account does have a month-to-month charge of $3/mo for one account, and $5/mo for a household with a number of accounts (no restrict even you probably have 8 youngsters). This account additionally permits personalised gifting, which is a good way to get household and associates to assist save!

Acorns Early

Acorns Early units up a custodial account and permits dad and mom to benefit from micro-investing (small increment investments). The service is constructed into the Acorns Gold plan which prices $12 per 30 days for the entire household.

Paying $12/mo ($144/yr) is usually a steep charge for comparatively small balances. Nonetheless, Acorns can get customers into the behavior of saving for his or her youngsters. Plus, take into account that the one flat charge covers your whole household. There isn’t any further value for including a number of youngsters.

Earlier than You Open A Custodial Funding Account

• Can’t take it again – Not like instructional financial savings accounts, a UTMA is an irrevocable present. Will probably be turned over to the account holder on the age of majority in your state. There is no such thing as a “out” clause in case your little one is irresponsible.
• Could also be topic to present taxes – Minors received’t be taxed if you happen to over-contribute to their account. However items over $15,000 per yr might be taxed. Learn more about the gift tax.
• Youngsters can use the cash for something – As soon as the account is turned over to a baby, they will use the funds for no matter they need. They might be prudent, however they could additionally blow the cash on one thing frivolous.
• Monetary support could also be affected – Custodial accounts are inclined to have an outsized impact on a baby’s means to obtain need-based school support. If the purpose is instructional financial savings, different accounts could also be higher.

High Options In Custodial Accounts

Custodial accounts is usually a helpful solution to switch cash to the following era. However these accounts have some drawbacks. These are some things to think about earlier than opening a UGMA or UTMA account on your little one.

Whereas each individual desires one thing completely different in an account, these are some options that make sense to think about.

• Simple to make use of – Usability ought to be a foregone conclusion as of late. Sadly, many brokerages conceal info in tough-to-find places. The brokerages we advocate make it simple to trace efficiency, place trades, and even make investments robotically.
• Low charges – Don’t hassle paying excessive charges on your custodial accounts. Accounts that function no commerce charges and low charges on funds (mutual funds or ETFs) are available.
• Simple authorized compliance – Custodial accounts are accounts owned by minors. Good brokerages will make it simple for fogeys to precisely file taxes primarily based on their little one’s property.
• Property out there – Some buyers favor broad-based index funds. Others favor particular person shares or bonds. We didn’t assessment any accounts that maintain “actual property” or options (like mortgage notes or actual property). Nonetheless, most of our suggestions provide a wide range of funding choices.

Don’t Neglect To Contemplate Options

Whereas the custodial funding accounts listed above provide nice worth, they aren’t your solely account decisions. For those who’re particularly seeking to save for a kid’s school, then an academic financial savings account like a 529 plan or a Coverdell ESA might make extra sense. Each present strong tax benefits when used in direction of certified instructional bills.

Even if you happen to do not anticipate that the cash you save for a kid shall be utilized in direction of training prices, a custodial account might not all the time be the only option. As an alternative, you might favor to carry funds in your individual account. That means you may give them as a present everytime you really feel assured that the kid is able to use the cash responsibly. 

Saving cash on your youngsters future is an admirable resolution. However earlier than you dive, fastidiously weigh the professionals and cons of every of the financial savings autos which can be out there to you to search out the one that gives the very best mix of options, prices, tax benefits, and suppleness.

Widespread Questions About Custodial Accounts