To start investing in stocks on their own, your kid will need a brokerage account, and they must be at least 18 years old to open one. They can, however, benefit from custodial accounts opened by parents or guardians. These accounts are specifically designed for minors to invest in stocks and other securities.
Below, CNBC Select breaks down the best investment accounts for kids, not including savings vehicles like certificates of deposit (CDs) or high-yield savings. Custodial brokerage accounts are a popular choice for parents looking to give their children a head start in investing.
Because minors are not eligible to open their own brokerage accounts, parents and guardians can open a custodial account in a child's name and manage it until the child reaches the age of majority. This allows parents to teach their children about investing and financial responsibility from an early age.
Custodial brokerage accounts are investment vehicles designed to benefit minors. A parent or guardian can open a custodial brokerage account on behalf of a child and manage it until the child reaches adulthood. This is a great way to introduce children to investing and help them build wealth over time.
There are four primary types of investment accounts for kids, each with their own rules and tax considerations. Kids can also invest in regular brokerage accounts, but these may not have the same tax advantages as custodial accounts.
Yes, you can start an investment account for your child. Many stock brokers offer custodial accounts, a type of investment account that a parent can open on behalf of their child. This is a great way to teach kids about investing and help them save for the future.
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