Why should a child have a custodial account?

With a custodial account, you can explain that the money belongs to the child and that you, as the custodian, are saving and investing for them until they reach adulthood. By showing a child the investment mix, types of assets, and performance reports, you can educate them about investing until the account becomes theirs.

Do I need a custodial account?

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.

What is a custodial account?

Typically offered by brokers, robo-advisors and investing apps, custodial accounts are managed by a custodian for the benefit of a child who is under age 18 or 21 (varies by state). Besides earning great returns, perhaps the biggest advantage of custodial accounts are the opportunity to teach children about money and investing.