Custodial brokerage accounts are one of the most popular ways to invest for a child. They let you buy stocks, exchange-traded funds (ETFs) and other assets on your child’s behalf while maintaining control until they reach adulthood.
But not all custodial accounts are created equal. Some platforms offer better investment options, lower fees or easier-to-use apps, which can make a big difference over time. In this guide, we compare the best custodial brokerage accounts based on fees, features and overall ease of use.
Not sure if a custodial account is right for you? Learn more in our guide to custodial accounts or explore all options in our investing for kids guide.
Quick answer: What is the best custodial brokerage account?
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Custodial brokerage accounts at a glance
Broker
Account type
Stock & ETF trades
Minimum deposit
Best for
Fidelity
UGMA/UTMA
$0
$0
Overall value
Charles Schwab
UGMA/UTMA
$0
$0
Beginners
Robinhood
UTMA
$0
$0
Simplicity
Interactive Brokers
UGMA/UTMA
$0
$0
Advanced investors
Vanguard
UGMA/UTMA
$0
$0
Long-term investing
E*TRADE
UGMA/UTMA
$0
$0
Research and tools
How we chose the best custodial brokerage accounts
We evaluated custodial brokerage accounts using Finder’s broker scoring methodology, with added emphasis on the features that matter most for parents investing on behalf of a child.
Each provider was scored across a weighted set of categories, including fees, investment options, platform usability and account availability.
Our methodology considered:
Fees. Platforms with $0 commissions, low account fees and no minimum deposit requirements scored highest.
Account availability. We prioritized brokers that offer UGMA and UTMA custodial accounts, with additional consideration for features designed specifically for managing investments on behalf of a child.
Investment options. We favored brokers offering a wide range of assets, including stocks, ETFs and mutual funds, for long-term diversification.
Trading platforms and usability. Platforms with intuitive apps, simple navigation and beginner-friendly design ranked higher.
Features and flexibility. We considered features like fractional shares, recurring investments and automated portfolios.
Research and support. Access to research tools, educational resources and customer support contributed to overall scores.
We then applied a custodial-specific lens to our rankings, prioritizing platforms that are easy to use, flexible and well-suited for long-term investing on behalf of a child.
We regularly review and update our rankings to reflect changes in features, fees and account availability.
What is a custodial brokerage account?
A custodial brokerage account is an investment account a parent or guardian opens for a minor. The child owns the assets, but the adult manages the account until the child reaches the age of majority.
Most custodial accounts are structured as UGMA or UTMA accounts, which allow you to invest in stocks, ETFs, mutual funds and other assets.
Easy to open. Most major brokers allow you to set up a custodial account quickly through a simple online application with minimal paperwork and often no account minimums or setup fees.
No contribution limits. Unlike 529 plans or other education accounts, custodial brokerage accounts have no annual or lifetime limits on how much you or others can contribute.
Flexible use. As custodian, you can use the funds for any purpose that directly benefits the child before they reach adulthood, such as education, extracurriculars, a car, or other needs—not just qualified college expenses.
Wide investment options. Custodial accounts provide broad access to stocks, ETFs, mutual funds, bonds and other securities, similar to a standard taxable brokerage account (with UTMA offering even more flexibility in some states).
Cons
Limited or no major tax advantages. Earnings are taxed annually as unearned income to the child and may be subject to the kiddie tax (taxed at parent's rate above modest thresholds). Unlike 529 plans, there's no tax-free growth for qualified expenses.
Impacts financial aid. Because the assets are considered the child's property, they are reported as student assets on the FAFSA and can reduce need-based aid eligibility by up to 20% of their value, a higher penalty than parent-owned assets.
Irrevocable contributions. Once you deposit money or assets into a custodial account, the gift is permanent and cannot be taken back or transferred to another beneficiary.
Loss of control. The child automatically gains full legal control of the entire account and can use the funds however they wish once they reach the age of majority or termination (typically 18-21, or up to 25 in some states depending on UGMA/UTMA rules).
Ease of use. A simple platform makes managing investments easier.
Tools and research. Helpful if you want more insight before choosing investments.
Automation. Features like recurring investments and robo-advisors can make long-term investing easier.
Bottom line
The best custodial brokerage account depends on your investing style and how involved you want to be.
Fidelity and Schwab stand out for overall value and flexibility, while Robinhood offers a simpler, more modern investing experience for parents who want an easy place to start.
A custodial brokerage account is an investment account opened by an adult for a minor. The child owns the assets, but the adult manages the account until the child reaches adulthood.
Fidelity and Charles Schwab are among the best custodial brokerage accounts due to their low fees, wide investment options and strong research tools.
Yes, but withdrawals must benefit the child while the account is under custodial control.
Yes, custodial accounts are subject to the kiddie tax, which may apply to a portion of investment income.
It depends. Custodial accounts offer flexibility, while Roth IRAs provide tax advantages if the child has earned income.
Matt Miczulski is an investments editor and market analyst at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on Yahoo Finance, CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.
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