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How to gift stock

Give a share of potentially lasting, and growing, value. How to buy stock as a gift.

Giving stock as a gift can be a thoughtful and impactful gesture and a nice nod to someone’s financial future. Stocks have the potential to appreciate over time, providing the recipient with the opportunity for long-term financial growth — and it can encourage a lifelong interest in investing.

Sixty percent of Americans have never invested in stocks outside their 401(k)s, according to Finder’s latest Consumer Confidence Index(1). And, as mentioned, stocks offer investors some of the greatest potential for growth over the long term.

But as unique and precious as it is, it’s important to consider several factors to ensure the gift aligns with the recipient’s financial situation, preferences and your own intentions. Here’s how to give stock as a gift and what to consider in the process.

How to gift stock in 3 steps

  1. Open a brokerage account.
  2. Purchase the stock.
  3. Transfer the stock.

1. Choose a broker and open an account

One of the quickest, easiest and most affordable ways to gift stock is online through a brokerage account. Both you and the person receiving the stock need an account when you give stock as a gift this way.

Gifting stocks to kids through a custodial account

Any adult can open a custodial account in a minor’s name, assuming they have all the required information to open the account. Grandparents, family members and even friends can open a custodial account for a child under 18 years of age.

With an account in your name and a custodial account for the minor, you can transfer over existing shares of stock, cash, exchange-traded funds (ETFs) and other securities or buy securities directly within the custodial account. You may choose to deposit cash as a gift and then select the stocks directly in the minor’s account.

As the custodian, you control the account until the minor becomes an adult. Once the minor turns 18 — or 21, depending on the state — they take full control of the account and its assets. Even before the minor becomes an adult, gifts made to a custodial account are irrevocable.

Here are some examples of kid-friendly brokers that offer custodial accounts:

  • Acorns Early. A UTMA/UGMA account built with Acorns‘ “Aggressive” ETF portfolio, with access to education and financial literacy content and automatic recurring contributions.
  • Schwab One Custodial Account. A brokerage account Charles Schwab offers that lets you buy and sell stocks, mutual funds, ETFs and other securities as a financial gift to a minor.
  • Stockpile. An investment 101 in stock trading, the Stockpile app lets kids invest in stocks, ETFs and crypto — with parent approval.

Our top picks for brokerage accounts for gifting stocks

Best for beginners

Go to site
Commission-free stock trading
  • No-cost financial planning and automated investing
  • $0 commission on stocks, ETFs and options
  • Get up to $1,000 in stock when you fund a new account within 30 days

Top pick for new account bonus

Go to site
$200 in US stocks
  • Trade options, futures, options on futures, stocks, ETFs
  • $0 commission to close options
  • Get $100-$5,000 when you open an account with $5,000 to $1,000,000+

Top pick for interest on uninvested cash

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Easy access to diverse assets
  • Trade stocks, bonds, options, ETFs, crypto, Treasurys, collectibles, royalties
  • Earn 5.1% APY on your cash
  • Earn a $0.18 rebate on options, with no commissions and no per-contract fees

Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.

Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.

Gifting stocks to kids through a custodial Roth IRA

Similar to a custodial brokerage account, you can open a custodial Roth IRA in the minor’s name, gift stocks and let the account grow tax-free until they reach retirement. Like anyone else, the child needs earned income to open an IRA. But income can be from anything as simple as mowing lawns to babysitting.

Gifting stock through a custodial IRA has unique benefits, including tax advantages and long-term growth potential since the account is designed for retirement.

Gifting stock to family or friends

Some brokers let you transfer stocks and other securities to anyone’s account, though they may require that both you and the recipient have an account with that broker. For instance, Charles Schwab will typically let you transfer stock to anyone’s brokerage account by filling out and submitting a Letter of Authorization (LOA). Transfers to another person’s brokerage account can take a few days.

If you don’t see an option online to make this type of transfer, contact the broker directly to see if it’s available.

Stocks for kids: help your child learn how to invest

Gifting stocks to your child is a valuable gesture, but teaching your child how to invest can give them an even bigger advantage in life.

“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”

More resources are available today than ever to help children learn about investing and get involved in the markets. For instance, Step is a financial platform designed to empower financial literacy for children and teens by offering guided banking and investing. Minors can buy and sell stocks, ETFs and bitcoin in your account, based on the parameters you set, and learn the ins and outs of investing early. When they turn 18, transfer the stock or crypto assets to their account.

Step Invest

Finder's pick for teaching kids to invest: Step

  • Kids can invest in stocks, ETFs and bitcoin with your help
  • Guide their learning by setting investing parameters
  • Transfer assets to your kid when they turn 18

2. Buy the stock you want to gift if you don’t already own it

Here’s the fun part — choosing the companies to buy for your recipient. Which stock should you buy? While you may consider choosing a company your loved one likes or products they often use, also consider stocks poised for the greatest growth and return potential.

Potential factors to guide your stock-picking decision:

  • Dividends. Many companies that are household names — often known as blue chip companies — like Coca-Cola, General Mills and Procter & Gamble tend to be relatively safe options, as they offer price stability, strong financial health and established track records. Plus, most pay dividends, which can help mitigate losses from a fall in stock prices and help compound their money faster over time. Be aware that a child’s unearned income from dividend stocks that totals more than $2,300 may be subject to a specific tax.(2)
  • Exchange-traded funds. If you’re unsure which stock to pick or want to gift exposure to multiple stocks at once, consider an ETF. These funds are a collection of multiple stocks and are usually less volatile.
  • Growth stocks. These are stocks of companies expected to grow at a faster rate than the overall market. Although growth stocks are riskier, picking the right one could offer bigger profit in the long run compared to a safe blue chip stock. Examples of growth stocks include Amazon.com (AMZN), Apple (AAPL) and Netflix (NFLX).
  • Favorite company. New and young investors might get hooked on investments with a stock from a familiar name.

What are the costs of buying stock?

Stocks range in value from pennies to over $540,000 for one share of Berkshire Hathaway Class A stock. Luckily, many brokers offer fractional shares trading, which lets you invest with a specific dollar amount instead of having to buy in at the stock’s current market price. With fractional shares, you can often invest with as little as $1. As for fees, many brokers now offer commission-free trading. If you plan to transfer stock to an outside account, you may incur a transfer fee. The sending broker dictates this fee.

3. Transfer the stock

The easiest transfer happens when the giver and receiver have accounts at the same brokerage firm. For a custodial account, a simple online process will transfer the stock in seconds. To transfer stock to someone other than the custodian whose account you manage, the process may be a little more complicated. It may require additional paperwork, like that LOA we mentioned earlier. You’ll need the recipient’s name, account number and contact information.

If you purchased the stock directly from the company or it’s an older, paper stock — bought before online stock trading technology — contact the company’s stock transfer agent to perform the change of ownership.

Compare online trading accounts

1 - 5 of 5
Name Product Ratings Available asset types Minimum deposit Stock trade fee Cash sweep APY Signup bonus
SoFi Invest®
Finder Score: 4.1 / 5: ★★★★★
SoFi Invest®
★★★★★
Stocks, Options, Mutual funds, ETFs, Alternatives
$0
$0
0.01%
Get up to $1,000 in stock
when you fund a new account within 30 days
Tastytrade
Finder Score: 4.6 / 5: ★★★★★
Tastytrade
★★★★★
Stocks, Options, ETFs, Cryptocurrency, Futures, Treasury Bills
$0
$0
N/A
Get $100-$5,000
when you open and fund an account with $5,000 to $1,000,000+
Highly commended for Best Derivatives Trading Platform award.
Public.com
Finder Score: 4.1 / 5: ★★★★★
Public.com
★★★★★
Stocks, ETFs, Cryptocurrency, Art, Treasury Bills, Collectibles
$0
$0
5.1%
N/A
2.5% fee applies to all alternative asset transactions.
Robinhood
Finder Score: 4.3 / 5: ★★★★★
Robinhood
★★★★★
Stocks, Options, ETFs, Cryptocurrency
$0
$0
1.5%, or 5% with Robinhood Gold
Get a free stock
when you successfully sign up and link your bank account.
Try Robinhood Gold for 30 days risk-free upon signup and earn a 5% APY on your uninvested cash, a 3% match on IRA contributions, up to $50,000 in instant deposits and more. Accounts are auto-downgraded after the trial period.
Moomoo
Finder Score: 4.7 / 5: ★★★★★
Exclusive
Moomoo
★★★★★
Stocks, Options, ETFs
$0
$0
5.10%
Choose a 1.5% match or 7 free fractional shares
when you open a new account and meet funding requirements
No commission stock and ETF trading, with a chance to get a 1.5% cash reward match or 7 free fractional shares.
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What should I consider when gifting a stock?

The biggest consideration is any potential taxes when you give a stock as a gift. You and the recipient could be on the hook for a gift tax or capital gains tax.

Gift tax

As of 2023, the IRS charges a gift tax for any gift over $17,000.

  • If the value of the stock is $17,000 or less, the gift does not have to be reported.
  • If the value of the stock is more than $17,000, the gift has to be reported, but no gift tax will be due until the lifetime gift exemption limit is reached. For 2023, it’s $12.92 million.
  • If the stock is gifted upon the giver’s death, the cost basis changes to its value on the date it was inherited rather than what you paid for it(3).

Capital gains tax

Capital gains tax is the annual tax on any profits you make from the stock. The amount is determined by your tax bracket and the profit you make if you sell the investment. Here are some considerations involving capital gains taxes when gifting stocks:

  • If the receiver is in a lower tax bracket than you and you transfer the stock, they’ll pay less capital gains tax than you would if they sell it.
  • If the giver’s tax bracket is lower, you may consider selling the stock and paying less capital gains tax. Then, gift up to $17,000 in cash and avoid a gift tax.
  • If the receiver is a nonprofit organization, a stock transfer or donation will result in neither party paying capital gains tax(4).
  • If the stock is worth less than you paid for it, you may choose to sell the stock, record a capital loss against other income and gift up to $17,000 in cash per recipient without paying a gift tax.

Who is most likely to be researching how to gift stocks?

Finder data suggests that men aged 25-34 are most likely to be researching this topic.

ResponseMale (%)Female (%)
65+1.86%
55-644.15%3.30%
45-5410.03%5.73%
35-4419.63%8.74%
25-3421.35%9.17%
18-2411.03%5.01%
Source: Finder sample of 698 visitors using demographics data from Google Analytics

Other ways to gift stocks

Opening a custodial account in a child’s name or transferring stock to another’s brokerage account is one of the best ways to gift stocks if long-term investing is the goal, but it’s not the only way to gift stock.

The site Giveashare offers an easy way to buy one share of stock as a gift. The recipient gets a framed stock certificate registered in their name, with all the benefits of being a company shareholder: annual reports, declared dividends and voting rights.

Mind you, this option is meant for those who want to emphasize the gift aspect of the stock, as the cost is well above the per-share price of any given stock. Giveashare’s prices include the stock’s market price plus added fees. For instance, one share of Tesla (TSLA) stock through the site costs $329 as of November 29, 2023, a nearly 35% premium over Tesla’s closing price of $244.14.

Bottom line

Stocks can be an exciting, valuable gift to those you love. They’re thoughtful because they require a bit more work upfront than a typical gift — but the value can often last longer.

Once you’ve decided who your grand gesture will go to, consider the best stock trading apps and best brokerage accounts to find a broker that’s right for your stock-gifting plans.

Frequently asked questions about gifting stock

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