If you already have a trust set up, you can open a Wealthsimple account in the name of your trust. Unlike opening a trust, opening a custodial account is simple. A custodial account is a savings account set up and administered by an adult for a minor. While the amount of money required to open a custodial account can be minimal— Stash, a financial services company in New York, allows users to start off with just $5—the fees associated with having one vary depending on who you’re banking with. The company is hoping parents will use its custodial accounts not only to grow money for their kids, but also as a financial learning tool. Options trading entails significant risk and is not appropriate for all investors. It is a violation of law in some jurisdictions to falsely identify yourself in an email. At the age of majority, the account holder may choose to sell any investments in the account or close the account and request a check for the proceeds. Opening a custodial savings account for your child will provide them with a chance to grow the money invested into this kind of account, as we’ve already said. By using this service, you agree to input your real email address and only send it to people you know. And unlike 529 accounts, which generally also provide some exposure to the markets, custodial brokerage accounts can be used to fund much more than just education. All funds in the account are considered a permanent gift that becomes the child’s assets once they reach age of termination. Any amount of money can be put into a custodial account, transferred from an adult’s accounts … We want the child’s interests to be reflected over time; we want the account to grow with them.”, How to Save for Baby’s Future Education with a 529 Plan, How to Prepare Your Finances for Baby’s Arrival, How to Write a Will to Protect Baby’s Future. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. While Stash won’t connect you to a human financial advisor for investment advice—its service revolves around its app, which is completely automated and optimized to showcase things like your earnings and dividend reports on demand— Stash Academy offers an array of financial literature that teaches kids (and you) about the basic tenets of personal finance and investing 101. The most common types of custodial accounts are known as UGMA (for the Uniform Gift to Minors Act ) or UTMA (for the Uniform Transfer to Minors Act ). Transferred to the minor at a certain age (between 18–25), Made with after-tax money, though there are tax benefits, For saving for college with special tax benefits, consider a, For getting an early start on the child's retirement savings, consider a, For greater flexibility transferring money at an age you choose (generally up to 35), consider a trust through our. Children who file taxes on their parents’ return are allowed a certain amount of unearned income at a reduced rate. Stash charges $1 a month for its custodial accounts—you don’t have to pay per trade like you do with some brokerages—and half that for any new accounts for subsequent children. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation. Make the most out of your financial life with easy-to-use tools and the latest insights from our team of specialists. 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