Got some excess cash lying around thanks to a summer job or perhaps a generous relative? Or maybe you\u2019re a parent hoping to introduce your child to the benefits of investing?<\/p>
It\u2019s easy to start investing for teens, so keep reading to find out how to put your money to work and create a more secure financial future.<\/p>
You need to be at least the age of majority in your province or territory (either 18 or 19 years old) to open your own investing account. So if you\u2019re aged 13-17 (or possibly 18 in some places), you can\u2019t open a brokerage account to trade stocks, ETFs and other assets.<\/p>
But don\u2019t let that put you off\u2014you can still start investing as a minor. A parent or guardian can open an investing account on behalf of their teenager, but there are a couple of different ways to go about this.<\/p>
There are two ways to start investing as a teenager:<\/p>
The first option is for a parent, guardian or grandparent to open an informal or formal trust brokerage account.<\/p>
An informal trust (also called an in-trust-for account) is the simplest option, and it allows the adult to manage investments on behalf of their teen until they reach the age of majority. A formal trust is more complicated but may be needed if you have a large sum to invest. ]<\/p>
You\u2019ll need legal assistance to create a trust deed if you choose this option. There are also tax implications to consider, as the parent will need to pay tax on any investment income earned in the account.<\/p>
Once the brokerage account has been set up and funded, you can use it to invest in stocks, ETFs, mutual funds, bonds and more for your teenager.<\/p>