6 Best Custodial Accounts of July 2023

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Custodial accounts, also known as UGMA/UTMA accounts, are brokerage accounts that allow parents or guardians to invest on behalf of their children or dependents. Ownership of these accounts transfers to the minors once they reach legal age (typically 18 or 21, depending on the state). Many brokerages also offer other custodial options like 529 plans, IRAs, and trusts.

You can also check out our guide of 529 plans by state for programs and promotional events. 

The Best Custodial Accounts

• Charles Schwab: Best for all types of investors
• Merrill Edge: Best for Bank of America clients
• Vanguard: Best for mutual funds
• Fidelity Investments: Best for low fees
• TD Ameritrade: Best for active traders
• E*TRADE: Best for robo advisors

Here are the best custodial accounts as picked by Insider’s editors.

Compare Custodial Accounts

Our Methodology

We reviewed more than a dozen custodial accounts using Insider’s rating methodology for investing products to find the best options for lowest fees, ease-of-use, flexible investment choices, and customer service availability. We also sifted through multiple investment platforms to find the best options both for self-directed traders and hands-off investors.

You’ll notice that many of the platforms mentioned in our guide offer the option to both trade on your own or automate your custodial account’s investments.

Custodial Accounts Frequently Asked Questions

Best Custodial Account for All Types of Investors

Charles Schwab

Known as the Schwab One Custodial Account, this account offers investors several perks. These include a $0 minimum opening deposit, $0 account setup and maintenance fees, and commission-free stocks and ETFs. In addition, you can invest in mutual funds and other securities and utilize investment research and other tools.

With Schwab Stock Slices, you can invest in fractional shares as long as you meet the $5 minimum requirement. And as with all custodial accounts, won’t have to worry about any contribution limits. Parents and guardians might also consider Schwab’s custodial IRAs (you can open these as a traditional IRA or Roth IRA), 529 college savings plans, and education savings account (ESA).

Another advantage of Schwab’s custodial account is that it isn’t just for self-directed investors. You can automate your investments by setting up the account through the Charles Schwab Intelligent Portfolios or Schwab Intelligent Portfolios Premium robo-advisors. Just note that you’ll need a minimum of $5,000 for the former and at least $25,000 for the latter.

Once the account beneficiary reaches legal age, they’ll retain complete ownership of the account’s earnings and can then utilize additional Schwab products if so desired.

What to look out for: If you decide to take the automated investing route for your custodial account, you’ll need at least $5,000 for Schwab Intelligent Portfolios and $25,000 for Schwab Intelligent Portfolios Premium.

Best Custodial Account for Bank of America Clients

Merrill Edge

Merrill Edge lets you invest for your minor without running into any minimum opening deposits, annual fees, or account maintenance fees. Merrill Edge also offers commission-free stocks, ETFs, and options. And you can choose the robo-advisor route with Merrill Guided Investing or Merrill Guided Investing with an Advisor.

If you’re already a Bank of America client, you can fund the account by linking your existing Bank of America account. Plus, Merrill Edge allows for checks, wire transfers, and transfers or rollovers from existing accounts.

In addition to its custodial accounts, Merrill Edge offers a vast range of other competitive products, including automated investing accounts (robo-advisors), IRAs, 529 plans, retirement calculators, margin accounts, and more.

Merrill Edge also offers 24/7 phone support and live chat.

What to look out for: Annual fees for Merrill Edge’s automated accounts — Merrill Guided Investing and Merrill Guided Investing with an Advisor — are on the higher side. You’ll incur a 0.45% fee for the former and a 0.85% fee for the latter.

Best Custodial Account for Mutual Funds

Vanguard

A behemoth in the retirement investing and mutual funds space, Vanguard also offers some competitive features with its custodial accounts. There aren’t any opening deposit, maintenance, or account transfer fees, and you can automate transfers from both your bank account and other Vanguard accounts.

Vanguard allows for investments in stocks, bonds, Vanguard mutual funds, non-Vanguard funds, and more. Plus, with Vanguard Personal Advisor Services, you can skip out on the self-directed investing route and take advantage of robo-advice paired with ongoing financial advisor guidance. Note, however, that you’ll need at least $50,000 to get started with this service, and you’ll be responsible for a 0.30% annual fee.

Vanguard’s suite of investment products also features 529 college savings plans and trusts. And if you’re looking to deepen your investing knowledge before and/or after you set up a custodial account, the brokerage offers an extensive selection of resources (investing tools and calculators, market news and perspectives, and educational guides) to help you do so.

What to look out for: Vanguard doesn’t currently offer fractional shares, and options contracts will cost you $1 (many brokerages charge $0.65 per contract).

Best Custodial Account for Low Fees

Fidelity

Fidelity’s custodial account lets you build wealth through stocks, ETFs, options, bonds, mutual funds, and much more. Plus, the account has no minimum opening requirements or fees, and any stocks, ETFs, or options the account holder invests in are commission-free.

Its custodial offerings are also supplemented with account perks like Fidelity Viewpoints, an online center with expert commentary on investing strategies, markets, and much more. In addition, Fidelity’s Planning & Guidance Center offers tools to help you meet investing goals.

Fidelity Investments offers multiple other minor investment account options beyond UGMA/UTMA custodial accounts. These include its Roth IRA for Kids account, 529 plan, Fidelity Youth Account (this account lets children between the ages of 13 and 17 invest on their own), and trust accounts.

What to look out for: Fidelity’s automated investing accounts — Fidelity Go and Fidelity Personalized Planning & Advice — don’t support custodial accounts.

Best Custodial Account for Active Traders

TD Ameritrade

TD Ameritrade offers a vast range of accounts for youth. These include its UGMA/UTMA accounts, Coverdell Education Savings accounts, and 529 plans (TD Ameritrade is no longer offering 529 plans to new clients).

And like all of the other brokerages listed above, you won’t have to worry about minimum deposits to get started. TD Ameritrade also offers a competitive investment selection. It gives you access to commission-free stocks and ETFs, and it provides more than 13,000 mutual funds. 

If you’re a hands-off investor and would rather leave the day-to-day trading decisions to the professionals, you’ll have to set up an account through Charles Schwab. TD Ameritrade is no longer accepting new clients for any of its managed portfolios, but you can still open an automated investing account through Schwab Intelligent Portfolios or Schwab Intelligent Portfolios Premium.

What to look out for: Schwab acquired TD Ameritrade, so many of the brokerage’s offerings have merged with Schwab’s. However, both platforms still offer standalone products, so be sure to keep this in mind as you weigh different account options.

Best Custodial Account for Automated Investing

E*TRADE

E*TRADE offers account options for all types of investors, but it provides a particularly competitive suite of custodial products. These include its standard UGMA/UTMA custodial account, IRA for Minors, and Coverdell ESA accounts. Its standard custodial account comes allows for commission-free stocks, ETFs, and options.

However, you’ll pay $1 per bond, and bond minimums can range from $10 to $250. Fees for funds vary, but E*TRADE currently offers more than 4,500 no-load, no-transaction-fee mutual funds. And those who prefer robo-advice can build wealth through its expert-managed automated investing account,Core Portfolios (note that you’ll need at least $500 to set up this account).

Its custodial accounts also have no income or contribution limits, and they come with a free debit card, checking perks, and online bill pay. 

What to look out for: E*TRADE doesn’t offer fractional share trading.

Other Custodial Accounts We Considered

• Acorns Invest: Acorns invests your money into a personalized portfolio of ETFs, so you don’t have to worry about the trading decisions in your account. One downside, however, is that you’ll pay a $5 monthly fee for custodial accounts.
• Ally Invest: Ally Invest offers a vast collection of investment products, and it gives you the option to set up a self-directed custodial account or an automated custodial account. One thing to consider, however, is that the platform doesn’t offer any no-transaction-fee mutual funds.
• Firstrade: Firstrade provides commission-free trading for stocks, ETFs, options, and mutual funds. The platform also offers international investing accounts, but it doesn’t provide any managed accounts or automated investing options.
• Fidelity Youth Account: Launched in 2021, the Fidelity Youth account places the power in the minors’ hands. The account allows teens between the ages of 13 and 17 to invest on their own, so it isn’t exactly a traditional custodial account. But like the standard UGMA/UTMA accounts, the Youth Account simply becomes a regular Fidelity brokerage account once the child reaches age 18.
• M1 Finance: Offering a combination of self-directed trading and automated investing for stocks and ETFs, M1 Finance is a competitive platform in the online brokerage space. However, only M1 Plus members get access to custodial accounts, and the M1 Plus subscription costs $125 per year.
• Stash Invest: Stash gives investors access to automated investing (for both stocks and ETFs), round-ups, banking, and more. The platform also offers retirement portfolios and family financial advice packages. One downside to consider, though, is that you’ll pay a $9 monthly fee — through the Stash+ plan — to utilize a custodial account.
• Stockpile: This investment platform is a great wealth-building option for kids and teens. It offers no minimums, no recurring fees, and no gift card or funding fees (you can buy gift cards that are redeemable for different stocks in your child or dependent’s account). One downside is that, while Stockpile offers thousands of stocks, it only offers two account types: individual accounts and custodial accounts.
• Loved App: Loved is a financial education app offering investment accounts and financial literacy resources for parents who want to get their kids (or other dependents) into investing at an early age. It lets you invest in themes, goals, and companies that align with your preferences, and you can set up custodial accounts. However, it may not be the best choice for those who want a wider range of account types and investment choices.