7 Best Custodial Accounts for Kids Under 18

Opening a custodial bank account for your child can help you teach them smart money habits, and the best ones are packed with features to help you do just that. You can find custodial checking, savings, and even investment accounts for your minor child, depending on the financial institution. 

Here are seven of the best custodial accounts for kids under 18.

1. Ally Bank

Best for: Wide array of account options

• Monthly fee: $0
• Minimum opening: $0
• Trading fees: $0 on self-directed stocks, ETFs, options

Ally Bank (formerly GMAC Bank) launched in 2000 as an offshoot of GMAC auto finance company). 

This online-only bank is an FDIC-insured, full-service financial institution. They can help with any financial needs, from mortgages to auto loans to personal banking and investment accounts. 

Here are the types of custodial accounts you’ll find at Ally Bank.

Custodial Online Interest Checking

Ally Bank’s custodial checking account features a debit card that has settings that let you control how, where, and when you use the card. Other features include:

• No minimum balance requirement or opening deposit
• No monthly service fee
• Free ATM withdrawals at over 43,000 Allpoint ATMs
• Free debit card with parental controls
• Interest paid on all balances
• Round-up to savings accounts option

Custodial Online Savings

Ally’s custodial savings account features an optional “Surprise Savings” feature that analyzes money in a linked checking account and transfers it to savings when it senses extra money. Other features include:

• No minimum balance requirement or opening deposit
• No monthly service free
• Free ATM withdrawals at over 43,000 Allpoint ATMs
• Buckets to categorize your savings funds
• Industry-leading interest rates
• Limit of 10 withdrawals per statement cycle

You can also open custodial Money Market or Certificate of Deposit accounts. 

Custodial Investment Account

Ally’s self-directed and robo-advisor accounts are available as custodial accounts and include many research tools. Other features include:

• No fees for self-directed trades on stocks, ETFs, and options
• $9.95 per no-load mutual fund trades
• $1 per bond trade, $4.95 for low-priced securities trades
• $0 opening requirement for self-directed accounts
• $100 opening requirement for robo accounts
• No advisory fees for robo accounts

Ally Bank offers 24/7 customer service by phone or chat. Each account comes with various features so you can tailor your child’s banking needs as desired. 

Go to Ally Bank

2. E-Trade

Best for: Easy-to-use trading platform

• Monthly fee: $0
• Minimum opening: $0
• Trading fees: $0 on stocks, ETFs, options

Beginning in 1982 as TradePlus, the owners branched off with E*Trade in 1991 to become one of the first online investment platforms. Morgan Stanley acquired E*Trade a few years ago and now offers a custodial brokerage account with some attractive features. 

E*Trade Custodial Brokerage Account

The E*Trade custodial brokerage account offers benefits such as a free debit card and checking privileges when you open a brokerage account. Other features include:

• No minimum opening deposit amount
• $0 annual fee for online self-directed trading accounts
• $0 stocks, options, and ETFs
• Option contracts are $0.65 per
• Futures contracts are $1.50 per

One downside of E*Trade is that it, like Vanguard, does not offer fractional shares except in the case of dividend reinvestments. E*Trade also offers Coverdell ESAs and custodial IRAs for income-earning minors. 

Telephone customer support is available Monday to Friday. E*Trade is on our list of the top stockbrokers that offer free trades. 

Go to E*Trade

3. Fidelity

Best for: Optional Youth Account for spending, saving and investing

• Monthly fee: $0
• Minimum opening: $0
• Trading fees: $0 on stocks, ETFs, options

Fidelity is also on our list of best free trade brokers. It was founded in 1946 and is one of the largest asset managers in the world. 

Fidelity Custodial Investment Account

Fidelity has an expansive array of online investment tools for investors. You can leverage the tools to help research investments properly and minimize the risk for your custodial account.

Other features include:

• $0 minimum opening deposit
• $0 maintenance fees
• Zero commissions for online stocks, commissions, and ETF trades

Fidelity’s Custodial Investment account is much like other brokers in many ways. It offers free online trading, a 529 Savings Account, and a youth IRA account. 

However, many choose Fidelity because of its non-custodial Youth Account for teens between 13 and 17. The account allows them to spend, save, and invest. There are no account fees or minimums, and Fidelity includes parental controls and a free debit card.

As a parent, note that you must have an existing Fidelity account for your teen to open a Youth Account. 

Go to Fidelity

4. Firstrade

Best for: Robust selection of research tools

• Monthly fee: $0
• Minimum opening: $0
• Trading fees: $0 on stocks, ETFs, mutual funds

Firstrade is geared toward serious investors looking to open a custodial investment account. The site has a robust selection of research investment tools.

Use Morningstar reports, watchlists, and more to help analyze and choose your child’s investments. 

Firstrade Custodial Brokerage Account

The Firstrade Custodial brokerage account offers benefits such as extended trading hours and equities investments. Other features include:

• $0 fee stock, ETF, and mutual fund trades
• No commissions
• $0 account opening requirement
• No minimum balance requirement

Firstrade offers Coverdell ESAs as well. Open the Firstrade account for your minor child, and have them shadow you as you invest with your Firstrade account. 

If you’re a serious investor, Firstrade offers an excellent avenue for helping your minor kids see you in action while getting in on the action with their account. 

Go to Firstrade

5. Stash

Best for: Beginning investment education selection

• Monthly fee: $9
• Minimum opening: $5
• Trading fees: $0 on stocks and ETFs

Stash has been around since 2015. The investment fintech accommodates custodial investment accounts with minimal fees and fractional share investing options. 

Stash+

Stash has two tiers of investment accounts: Stash Growth and Stash+.

Stash+ is the account you’ll need to open if you want to open custodial investment accounts.

Features include:

• $9 monthly fee for two custodial investment accounts (plus your own)
• $5 opening minimum
• Fractional stock share transactions
• Banking access
• Stash Stock-Back® Card1

You might find the monthly fee is high for your tastes, but remember that the $9 per month includes the option to have three brokerage accounts; one adult account and two custodial accounts. 

Note that you can purchase fractional shares of stock for as little as $0.01, and all Stash accounts offer investment advice when needed.   

Go to Stash

Paid non-client endorsement. See Apple App Store and Google Play reviews. View important disclosures.

Nothing in this material should be construed as an offer, recommendation, or solicitation to buy or sell any security. All investments are subject to risk and may lose value.

1Stash Banking services provided by Stride Bank, N.A., Member FDIC. The Stash Stock-Back® Debit Mastercard® is issued by Stride Bank pursuant to license from Mastercard International. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Any earned stock rewards will be held in your Stash Invest account. Investment products and services provided by Stash Investments LLC and are Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.

6. Stockpile

Best for: Family-focused platform

• Monthly fee: $4.95
• Minimum opening: $0
• Trading fees: $0 on self-directed stocks, ETFs, options

Stockpile is a brokerage that allows you to bull, sell and gift fractional shares of stock. The goal of founder Avi Lele when he first started the company was to give stock shares to his nieces and nephews. 

Stockpile Custodial Investment Account

Stockpile’s custodial investment account allows you to buy fractional shares of stocks and ETFs for as little as $1. Choose from thousands of popular stocks and ETFs.

Some Stockpile features include: 

• $0 trading fees
• No commissions
• Gift cards available
• No minimum balance requirement

The $4.95 monthly fee includes 1 adult account and up to 5 kid accounts.

You can have relatives and friends gift stock shares to your child’s Stockpile account, but there is a fee for purchasing gift cards. Stockpile’s main benefit is that it lets you buy fractional shares in small amounts with no fees.

Go to Stockpile

7. Vanguard

Best for: Well-known company and platform

• Monthly fee: $0 ($20 annual fee with option to waive)
• Minimum opening: $0 ($3,000 for custodian account)
• Trading fees: $0 on self-directed stocks, ETFs, options

Vanguard was founded in 1975 by investment great John C. Bogle. Also a member of SIPC, Vanguard is well known for its high-performing mutual funds.

Vanguard UGMA/UTMA

The Vanguard UGMA/UTMA account offers a broad line of investment options with an attractive fee schedule for self-directed investors. Some features include:

• $20 annual management fee (can be waived)
• $0 minimum opening deposit ($3,000 minimum for required custodian account)
• Free online ETF, mutual fund, and stock trades
• $1 per-contract for online options trades

The $3,000 minimum investment Vanguard requires for custodians may be a hurdle for some investor custodians. 

While these parameters might take you out of the running for Vanguard when you first start investing, you can always transfer your account from another broker when you reach a balance of $3,000 or more. 

Vanguard also offers a 529 College Savings Plan for minors – a Nevada plan – available to families in all 50 states. 

Go to Vanguard

How Do Custodial Accounts for Kids Work?

Custodial banking and investment accounts are opened and managed by an adult on behalf of a child. The custodian doesn’t have to be a parent or other relative, but they must commit to handling the money in the child’s best interest. This commitment is also known as a “fiduciary relationship.”

There are two main types of custodial banking accounts: 

UGMA accounts allow minors to own cash assets such as cash, stocks, bonds, and mutual funds. UTMA accounts can hold those investments while including other assets such as real estate. 

Make sure you speak with an investment advisor well-versed with custodial accounts to determine which one you should open.

How to Choose a Custodial Account

When choosing a custodial account for your child, you’ll first want to consider your needs. Do you need a checking account for everyday spending? Or maybe you just want a savings account for your kids to start saving money. Or perhaps your kids are interested in investing. Also, consider the features you’ll need in the account.

Once you know what type of account you want, you’ll want to consider convenience. Even though this account is for your child, you’ll still need convenient access to it. You may want to look into accounts where you already bank and invest.

Lastly, you’ll want to look at the fees the account charges. Excess fees will likely frustrate someone just getting into banking and investing, and you want them to have a positive experience. Plus, they likely don’t have much money right now, so every fee can take a big bite out of their balance.

Take your time and choose an account that makes the most sense for your and your family.

Final Thoughts on Custodial Accounts

You can open many types of custodial accounts for kids under 18. You can choose from spending or checking accounts, savings accounts, brokerage accounts, IRA accounts, and education savings accounts.

The custodial account you choose will depend on which benefits you’re searching for your child and the fees, minimum balances, and other features that best fit your needs. 

There’s no need to limit your child to just one custodial account at one institution. Pick and choose custodial accounts based on how they fit the financial goals you have in mind for your child(ren).

And keep fees in mind, as we all know that fees can be vital to how fast (or how slow) your portfolio grows