Top 10 Custodial Account for Teen Investors
Updated July 9, 2026
Top 10 Custodial Brokerage Accounts
Which custodial brokerage account is best for your kid? For most families, Fidelity — it's the only major broker offering both a parent-managed custodial account and the teen-owned Fidelity Youth Account, with no commissions, no minimums, and no monthly fees. But nine other brokers are worth a look, and the right one depends on where you already bank, how hands-on your teen wants to be, and whether you value simplicity or power. Here are our ten picks, ranked, with the reasons why.
Our Top 10 at a Glance
1. Fidelity Investments — best overall for families
2. Charles Schwab — best customer service
3. M1 Finance — best for automated, hands-off portfolios
4. Robinhood — best app experience from a major broker
5. Firstrade Securities — best lesser-known value
6. Ally Financial — best if your family banks with Ally
7. E*TRADE (Morgan Stanley) — best for teens with summer-job income
8. Merrill Edge — best for Bank of America families
9. Vanguard — best for long-term index investing
10. Interactive Brokers — best platform to grow into
The Ten, Reviewed
1. Fidelity Investments — best overall.
Fidelity offers both a standard custodial (UGMA/UTMA) account and the Fidelity Youth Account, which teens ages 13–17 own and trade themselves while a parent stays connected. Zero commissions on stocks and ETFs, no account minimums, no subscription fees, and fractional shares from $1. No other broker covers the whole family this completely.
Link: https://www.fidelity.com/open-account/custodial-account
2. Charles Schwab — best service.
Schwab (which absorbed TD Ameritrade) offers custodial accounts plus the Schwab Teen Investor account for teens who want the wheel. Commission-free stock and ETF trades, no minimums, and customer service that's consistently among the best in the industry.
Link: https://www.schwab.com/custodial-account
3. M1 Finance — best for automated portfolios.
M1's “pie” system lets a family build a diversified portfolio once and automate everything after — new deposits are invested across the pie without anyone placing trades. Two things to know against our own criteria: opening a custodial account requires an existing M1 brokerage account and a $100 first deposit (after that, deposits can be as small as $10), and M1 has charged a monthly platform fee on smaller balances — check the current fee schedule before opening. [VERIFY current fee terms]
Link: https://m1.com/invest/custodial/
4. Robinhood — best app from a major broker.
The company that made commission-free trading standard now offers custodial accounts (UTMA), complete with a gifting link that lets relatives contribute cash, stock, or ETFs for birthdays and holidays — even without a Robinhood account. The app is the cleanest in the business, which matters for teens who will check it on a phone.
Link: https://robinhood.com/us/en/custodial/
5. Firstrade Securities — best value you haven't heard of.
A discount broker that's been around since 1985, with $0 commissions, no minimums, and custodial accounts. Less famous than the giants, but a solid, stable operator.
Link: https://www.firstrade.com/accounts/education
6. Ally Financial — best for Ally families.
Commission-free trading that integrates seamlessly with Ally's popular online banking. If your family already banks there, keeping the custodial account under the same roof is genuinely convenient.
Link: https://www.ally.com/stories/invest/what-is-a-custodial-account-investment-accounts-for-kids/
7. E*TRADE (Morgan Stanley) — best for working teens.
Along with a solid custodial account, E*TRADE offers custodial IRAs — a powerful option if your teen has earned income from a job and you want decades of tax-free compounding on it.
Link: https://us.etrade.com/what-we-offer/our-accounts/custodial-account
8. Merrill Edge — best for Bank of America families.
Custodial accounts that integrate with BofA banking and its Preferred Rewards program. The natural pick if that's where your family's money already lives.
Link: https://www.merrilledge.com/education-savings/custodial-accounts
9. Vanguard — best for buy-and-hold.
The company that invented index-fund investing offers custodial accounts with access to its famously low-cost funds. The platform is more bare-bones than the others here, but for a family whose plan is “buy an index fund and let it compound for a decade,” that hardly matters.
Link: https://investor.vanguard.com/accounts-plans/ugma-utma
10. Interactive Brokers — best to grow into.
A powerful, global platform that's more than a beginner needs — but a young investor who gets serious will never outgrow it. Commission-free trades on its Lite tier and fractional shares.
Link: https://www.ibkrguides.com/clientportal/ugma-utma-account-info.htm
Also add in this entry: “For app-style alternatives (and the risks of the youth apps that keep disappearing), see our guide to teen money and investing apps.”
“You may notice apps like Greenlight and Acorns Early aren't ranked here — they're subscription-based family money apps rather than traditional brokerages, and we cover them separately in our guide to teen money and investing apps.”
How We Chose (Our Criteria)
We rank custodial brokerage accounts on five things:
• $0 stock and ETF commissions. Trading fees eat small accounts alive.
• No account minimums. Most teens start with very little money.
• Fractional shares. Your kid should be able to invest as little as $1 in a company whose stock costs hundreds.
• No monthly fees. Subscriptions quietly drain small balances — where a pick on our list charges one, we say so.
• Funding stability. Youth-focused brokers keep going bankrupt or shutting down — Flyte, One, Stack, and most recently Stockpile. We favor established firms that will still exist when your child turns 18. Our article on why youth investing apps keep disappearing explains what happens to your money when one folds.
Custodial Account vs. Teen Account: Which One?
A custodial account is opened and controlled by the parent; the assets legally belong to the child, who takes control at the age of majority. A teen account — like the Fidelity Youth Account or Schwab Teen Investor — is owned by the teen (ages 13–17), who places their own trades while the parent monitors. Custodial accounts work at any age from birth; teen accounts require the teen to be 13+ and generally a parent with an account at the same broker. For the full picture of both paths, see our complete guide on how to invest under 18.
What Is a Custodial Account, Exactly?
Custodial accounts come in two flavors, depending mostly on your state: UGMA (Uniform Gifts to Minors Act) and UTMA(Uniform Transfers to Minors Act). In both, an adult — usually a parent or grandparent — manages the account, but the assets belong to the child in the eyes of the law. Two things every parent should know before opening one:
• Contributions are irrevocable. Money put into a custodial account is a completed gift to the child. You can't take it back later.
• The child takes full control at the age of majority — 18 in some states, 21 in others, and as late as 25 for certain account types. Until then, you make (or approve) every investment decision.
Part of the account's earnings is generally taxed at the child's lower rate, but the “kiddie tax” rules have real teeth above certain thresholds — our article on custodial accounts and taxes covers what parents need to know.
How to Open a Custodial Account
Opening one takes about fifteen minutes online. Have these ready:
• Your child's full name, birth date, and Social Security number
• Your own Social Security number and driver's license
• Your employer's name and address (brokers ask as part of standard identity rules)
• Your bank information, to fund the account
Choose the broker, select “custodial account” (the broker will apply your state's UGMA or UTMA rules), enter the information above, link your bank, and make the first deposit — with fractional shares, even $10 is a real start.
One More Thing: The Account Is the Easy Part
Opening the account takes fifteen minutes. Teaching your kid what to do with it is the part that pays off for fifty years. Start them with our free guide on how to invest under 18 and our 7 Steps to Investing as a Teenager — and when they're ready to go deeper, the TeenVestor Stock Certification Course takes them from zero knowledge to confident investor at their own pace.
Putting Custodial Accounts to Use
Custodial brokerage accounts are great but parents should teach their kids how to invest in stocks at the same time. If teens want to know how to invest using a custodial brokerage account, check out our course at this link ( TeenVestor Stock Certification Course) or click on the image below.
