Should a child have a custodial brokerage account?

"The main benefit of a custodial brokerage account is that it allows minors to begin investing in the stock market at an early age," Miser says. The earlier you start investing for your child's future, the bigger their future nest egg can become.

What is a custodial account & UTMA account?

Custodial accounts function like any other type of brokerage account. Custodians can buy and sell stocks, bonds, different types of funds, annuities and other investment securities. UTMA accounts can hold other types of tangible assets.

How does a custodial account work?

Custodial accounts help adults save and invest money on behalf of a child—until the child reaches a certain age when the account must be transferred to them. Money put into a custodial account is an irrevocable gift to the child the account was established for—the custodian must ensure that it is invested and used for the child's benefit.