Custodial Accounts: 9 Best Options of June 2024 - NerdWallet (2024)

Looking for a way to set a minor with an investment account, but aren't sure where to start? You likely want a custodial account.

A custodial account is a common way for adults to start an investment account for a child, whether their own child, a grandchild or another minor. With a custodial account, the adult — also known as the account custodian —manages and maintains ownership of the account until the child reaches the age of majority, which varies by state. At that point, the child is generally able to take control of the account and funds, though in some cases you may be able to continue to apply restrictions.

You may also see custodial accounts described as UGMA/UTMA accounts. This is based on the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act — the legislature that allowed for the formation of these custodial accounts.

To arrive at our list of the best custodial accounts, we looked at factors that matter most to both the adult who started the account, as well as the child who will eventually take control of it. These factors include how robust a broker's educational materials are, how strong its customer support is, and how low its fees are, among other criteria.

Looking for a way to set a minor with an investment account, but aren't sure where to start? You likely want a custodial account.

A custodial account is a common way for adults to start an investment account for a child, whether their own child, a grandchild or another minor. With a custodial account, the adult — also known as the account custodian —manages and maintains ownership of the account until the child reaches the age of majority, which varies by state. At that point, the child is generally able to take control of the account and funds, though in some cases you may be able to continue to apply restrictions.

You may also see custodial accounts described as UGMA/UTMA accounts. This is based on the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act — the legislature that allowed for the formation of these custodial accounts.

To arrive at our list of the best custodial accounts, we looked at factors that matter most to both the adult who started the account, as well as the child who will eventually take control of it. These factors include how robust a broker's educational materials are, how strong its customer support is, and how low its fees are, among other criteria.

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