Updated July 5, 2026
How to Choose an Online Broker for Teens
Picking the right online broker is one of the most important early decisions you and your parents will make.
One of the first investing decisions you and your parents will make, after you choose which companies to invest in, is which online broker to use. Your parents have to be involved, because to invest as a minor you generally need a custodial account, or a teen account they help set up and approve. This guide walks through what to look for, so the two of you can pick the broker that fits you best.
If your parents already use a broker, they may simply want to open a custodial account for you there. That is a perfectly good option. But it still helps to know what makes one broker better than another, so you can make an informed choice.
There are a lot of online brokers, and the websites can be confusing. To keep things simple, we assume you mainly want to buy and sell stocks and ETFs, using straightforward transactions done entirely online, without phone help. We also assume you are not doing complicated things like short selling (selling stocks you do not own), trading options, or buying on margin (borrowing money to buy stocks). If that sounds like you, the guidelines below will help you find a low-cost, reliable broker.
Before you choose a broker and start trading start with our guide on how to start investing as a teenager, then come back to pick your broker."
In addition, our TeenVestor Stock Certification Course walks you through how to invest in stocks, step by step.
The sections below cover the things to look for in a broker for teen investors and a list of Teenvestor-friendly online brokers and investing apps.
7 Things To Check About a Broker for Teen Investors
Here's the quick checklist — each item is explained in detail below:
SIPC membership
$0 account minimums
$0 commissions
Fractional shares
No monthly subscription fee
Low exit (ACAT transfer) fees
An established, durable firm
Broker insurance: SIPC
Reputable U.S. brokers are members of the Securities Investor Protection Corporation, or SIPC. If a SIPC-member broker fails and goes out of business, SIPC helps return the cash and securities in your account, up to $500,000 per customer, including up to $250,000 in cash.
It is important to understand what this does and does not cover. SIPC protects you if the broker itself collapses and your assets go missing. It does not protect you from losing money because an investment dropped in value. In other words, it covers broker failure, not bad investment decisions. Before you open an account, look for the SIPC membership notice on the broker's website. If a broker is not a SIPC member, treat that as a serious red flag.
Minimum balances
Most Teenvestors are short on cash, so you want a broker that lets you start with little or no minimum balance. The good news is that because of heavy competition, most of the big online brokers have dropped account minimums entirely. Still, check two things before you sign up: whether the broker requires a minimum balance to open or trade, and whether it charges any monthly fee for keeping a low balance. A broker that charges small accounts extra fees is not a good fit for a beginner with a little bit of money to invest.
Trading costs (commissions)
The cost to buy and sell stocks and ETFs matters a lot when you are investing small amounts. The good news is that these costs have come down dramatically. Robinhood helped start this shift by offering commission-free stock and ETF trades through a mobile app, with no minimum balance. That pushed the traditional brokers to match, and today commission-free trading on U.S. stocks and ETFs is standard at nearly every major broker.
For a Teenvestor buying stocks and ETFs, you should not have to pay a commission at all. If a broker still charges one for basic stock and ETF trades, look elsewhere.
Fractional shares
Some stocks cost hundreds or even thousands of dollars for a single share, which puts them out of reach if you have only a little to invest. The fix that many brokers now offer is fractional shares. Instead of buying a whole share, you buy a small slice of one, so you can invest as little as $1 or $5 in a company whose shares cost far more.
Robinhood and the newer apps offered this first, but big traditional brokers like Fidelity and Charles Schwab now offer it too. Fractional shares make a broker much more Teenvestor-friendly, so it is a good feature to look for. One thing to keep in mind for later: if you ever move your account to another broker, fractional shares sometimes have to be sold rather than transferred. More on that below.
Watch out for subscription fees
Some brokers, especially the newer teen and family apps, charge a monthly or yearly subscription fee just to use the account. These fees can range from a few dollars a month to more than $100 a year. For a Teenvestor with a small balance, a subscription can eat up a big chunk of your money before your investments have a chance to grow. Paying $60 a year on a $200 account, for example, is a 30% drag before you earn a cent.
That does not automatically make these apps bad. Some bundle in helpful extras like lessons, an allowance tool, a debit card, or parental controls, and for some families that hand-holding is worth paying for. But if all you want to do is buy and hold stocks and ETFs, a free broker with no subscription is usually the better value. Just know what you are paying for.
Hidden costs
A low minimum balance and free stock trades are great, but watch out for other costs that can sneak up on you. A few things to check:
• Some less-reputable brokers advertise low commissions but add extra 'handling' or 'processing' charges on top.
• Buying and selling mutual funds often costs more than trading stocks or ETFs, so if you plan to buy funds, check those fees separately.
• Some brokers charge for things like paper statements, wire transfers, or account inactivity.
Every broker is required to post its fees and rates on its website. Read that list carefully before you decide. If the fee schedule is hard to find or hard to understand, treat that as a warning sign of its own.
How easy is it to get your money out?
Here is something most beginners never think about: a broker can be cheap to join but expensive to leave. If you ever want to move your account to a different broker, the transfer happens through a process called ACATS, often called an 'ACAT transfer.' Some brokers charge a fee to send your account out, frequently $75 to $100.
The big traditional brokers are generous here. Fidelity, Charles Schwab, and Vanguard charge nothing to transfer an account out, and some will even reimburse the fee to bring one in. Many smaller apps, on the other hand, charge $75 to $100 to leave, and they often sell your fractional shares instead of transferring them, which can create a surprise tax bill and leave you out of the market for a few days. Before you commit to a broker, it is worth checking how much it costs to leave, not just how much it costs to join.
Who actually holds your money?
When you open an account, the friendly app or website you sign up with is not always the company that actually holds your stocks and cash. Many brokers, especially newer apps, use a separate behind-the-scenes company called a clearing firm to hold the securities, settle the trades, and keep the records. Several teen investing apps, for example, use clearing firms named Apex or Alpaca.
Most of the time you never notice this. But it matters if your app runs into trouble or shuts down, because your account is really sitting at the clearing firm, and you may suddenly have to deal with a company you have never heard of to get your money. It is worth knowing who holds the money behind the app before you sign up. A well-known, established broker, or one that uses a large, reputable clearing firm, is one less thing to worry about.
Pick a broker that will still be around
Over the past few years, a lot of apps built for teen and young investors have shut down, been sold, or stopped offering investing altogether. Stockpile, for example, wound down its brokerage business and moved its customers' kids' accounts to another company. Others closed with little warning, leaving families scrambling to recover their money.
When an investing app disappears, it is a headache. Accounts get frozen or moved, features vanish, and you may have to open a new account somewhere else and start over. That is why it pays to choose a broker with staying power. Big, well-established brokers that have been around for decades, and large, well-funded companies with more than one line of business, are far more likely to still be here in five or ten years than a brand-new app. For money you plan to invest for the long term, boring and durable beats shiny and new.
Custodial account vs. teen-owned account
Because you are under 18, you cannot open a regular brokerage account entirely on your own. You have two main ways to invest, and it helps to know the difference.
A custodial account, called a UGMA or UTMA account, is opened and controlled by an adult, usually a parent, on your behalf. The money and investments legally belong to you, but your parent places the actual trades until you reach the age when the account becomes fully yours, usually 18 to 21 depending on your state. Fidelity, Charles Schwab, Vanguard, E*TRADE, Interactive Brokers, and Ally Invest all offer these, and so do apps like Acorns and Stash.
A teen-owned account is a newer option where you actually own and control the account yourself, with a parent linked for oversight. Fidelity's Youth Account and the Schwab Teen Investor account work this way, usually for teens ages 13 to 17. You place your own trades, and your parent can keep an eye on things.
Both are good ways to start. A custodial account keeps your parent in the driver's seat, while a teen-owned account gives you more hands-on control. Talk it over with your parents and pick the setup you are both comfortable with. Keep in mind that money in either kind of account counts as your asset, which can affect financial aid later, and investment gains can have tax consequences. Our pages on custodial account taxes and IRAs go into more detail.
Top Teenvestor-friendly online brokers
Brokers pile on features to get you to sign up. We keep it simple. For a Teenvestor, the main question is whether you can buy stocks and ETFs cheaply, through a custodial or teen account, without needing a big balance. Extras like real-time quotes, instead of quotes delayed 15 minutes, do not really matter for someone investing small amounts for the long haul.
Here is an updated list of Teenvestor-friendly brokers, split into two groups.
Traditional, established brokers
These have been around a long time, charge no commissions on stocks and ETFs, have no account minimums, and do not charge a subscription. They are also the most durable and the cheapest to leave.
• Fidelity. Offers both custodial accounts and the teen-owned Fidelity Youth Account. Commission-free, with no minimum and no subscription.
• Charles Schwab. Now owns TD Ameritrade. Offers custodial accounts and the Schwab Teen Investor account.
• Vanguard. Offers custodial (UGMA/UTMA) accounts. A large, long-established firm known for low-cost index funds.
• E*TRADE. From Morgan Stanley. Offers custodial accounts, and even custodial IRAs for teens with earned income.
• Interactive Brokers. Offers custodial accounts. A powerful platform, though more advanced than most beginners need.
• Ally Invest. Offers custodial accounts with commission-free stocks and ETFs, alongside Ally's online banking.
• Robinhood. The app that helped make commission-free trading standard. It previously did not offer custodial accounts, but it now does, so teens can invest through a Robinhood custodial account.
Youth-focused apps
These are built specifically for teens or families and often add lessons, an allowance tool, a debit card, or parental controls. Most charge a subscription, and some can be costlier to leave, so weigh the extras against the fees.
• Greenlight. A family money app with a debit card, allowance, chores, and parent-approved investing. Subscription-based.
• Acorns. Offers custodial (UGMA/UTMA) investing for kids through Acorns Early, with automated, hands-off portfolios. Subscription-based.
• Stash. Offers a parent-run custodial account it calls a Kids Portfolio. Subscription-based. This is also where Stockpile's former customers were moved.