The Ultimate Guide to UGMA Accounts in 2024

A custodial account is a savings or investment account an adult opens and administrates on behalf of a minor. The best custodial accounts offer a range of benefits, including tax advantages, flexibility, and ease of use. These accounts, also known as Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts, are a popular way for parents and guardians to save and invest for their children's future.

Opening a custodial brokerage account can usually be done in just a few minutes and entirely online. Here are some of the things to know when considering this type of account. Custodial accounts allow you to open and manage an investment or savings account on behalf of a minor. You are the account custodian until the minor reaches the age of majority, at which point they gain control of the account.

Want to start an account for your kids that isn't just for college? Check out our list of the best custodial accounts and learn how to get started. Explore the best custodial accounts for your child's investments. Understand their benefits, tax implications, and how they operate. A custodial account is a financial account managed by one person for the benefit of another. Custodial accounts are commonly opened by parents looking to save and invest for their children's future.

UGMA or UTMA accounts are accounts created under a state's law to hold gifts or transfers that a minor has received. These accounts offer a way for minors to receive gifts, inheritances, or transfers from family members. Custodial accounts offer a range of investment options, including stocks, bonds, mutual funds, and more. They can be a great way to start building a nest egg for your child's future.

This guide helps explain what to look for in a custodial investment account and lists some of our favorites. When choosing a custodial account, it's important to consider factors such as fees, investment options, and tax implications. By comparing the perks, limitations, fees, and more from the top UGMA/UTMA accounts, you can make an informed decision about which account is right for your child.