How much tax does a custodial account pay?

A portion (up to $1,250 in 2024) of any earnings from a custodial account may be exempt from federal income tax, and a portion (up to $1,250 in 2024) of any earnings in excess of the exempt amount may be taxed at the child's tax rate, which is generally lower than the parent's tax rate.

What are the best Custodial accounts?

The best custodial accounts are accessible and low-cost, user-friendly platforms for parents or guardians to invest funds on behalf of their children. Custodial account investment options also offer multiple tax perks. Remember that funds in these accounts must be used for the child's benefit.

How much does a custodial account cost?

A custodial account has no enrollment, transfer, or advisor fees. However, you will be charged $25 for each brokerage account. As the primary account owner, you can avoid this fee by signing up for Vanguard's e-delivery service. This service allows you to receive documents such as your statements and fund reports electronically.