An investment account can help set your child on a path to a solid financial future. Even before they're old enough to add or subtract, you can open a 529 college savings plan or a Trump Account that they'll be able to access when they're older.
If you want to give them hands-on guidance, though, there are joint brokerage accounts that let teens actively participate in trading. Seeing their investments grow can instill good money habits that last a lifetime.
Below, CNBC Select highlights seven of the best investment account options for kids, including their key benefits and what parents should know before opening one.
Teen-owned brokerage accounts
Who's this for? Several top brokerages offer investment accounts for minors, which are ideal for parents who want to teach older kids the investing ropes. Available for children 13 to 17, Fidelity Youth® Accounts allow kids to invest in U.S. stocks, ETFs and mutual funds, while parents can still monitor all transactions.
Standout benefits: Fidelity Youth Accounts have no minimums or maintenance fees and include a debit card with unlimited ATM fee reimbursements.
What to know: Teen-owned brokerage accounts are considered "student assets" and can affect eligibility for federal financial aid for college more than parent-owned assets.
Fidelity® Youth Account
Minimum deposit and balance
Teens aren't tied to any account minimums and there are no monthly fees
Fees
$0 commissions for online U.S. stocks*
Bonus
For a limited time: When you (parent or guardian) initiate the opening of a new Youth Account and your teen (aged 13 to 17) downloads the Fidelity Mobile® App and activates the new account, your teen will receive a $50 deposit as a reward1
Investment vehicles
Brokerage and trading: Fidelity® Youth Account
Investment options
Stocks, ETFs and mutual funds
Educational resources
Teens can access a financial curriculum made just for them to learn about saving, spending and investing
Terms apply.
Pros
- No account minimums or monthly fees
- Educational investing resources customized for young teens
- Requires parental oversight: In order for a teenager to sign up, their parent or guardian must already have an existing Fidelity account. Parents can monitor their child’s account activity and set up notification alerts for trades, transactions and spending
- Teen users get access to a free debit card with no subscription fees, no account fees, and no minimum balances
Cons
- Only available to teens aged 13 to 17
- In order to sign up as a teen, parent or guardian must already have an existing Fidelity account
*$0.00 commission applies to online U.S. equity trades and Exchange-Traded Funds (ETFs) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.
The Fidelity Youth Account can only be opened by a parent/guardian. Account eligibility limited to teens aged 13-17.
1Limited Time Offer. Terms Apply. Before opening a Fidelity Youth Account, you should carefully read the account agreement and ensure that you fully understand your responsibilities to monitor and supervise your teen's activity in the account.
Joint teen brokerage accounts
Who's this for? A Schwab Teen Investor™ Account lets both parents and kids 13 to 17 trade stocks, ETFs and mutual funds, but mom and dad can set up alerts for trading activity and money transfers and limit what can be traded (including no options, futures or margin trading). It's a good fit for parents who want a more collaborative investing experience, not just monitoring from the sidelines.
Standout benefits: There are no minimums or account fees, and teens can invest in fractional shares and fixed-income products such as U.S. Treasury bills. Teens who complete Schwab's online investing course within 45 days of opening the account receive $50 in fractional shares, split across the top five S&P 500 stocks.
What to know: The Teen Investor Account is also considered a student asset for federal financial aid purposes.
Schwab Teen Investor™ Account
Minimum deposit and balance
No minimum initial deposit and no account maintenance fees
Fees
$0 commissions on online listed equity trades; no hidden fees
Bonus
Teens who complete the Quick Start to Stock Investing course within 45 days of opening their account receive $50 in fractional shares split across the top five stocks in the S&P 500. Terms apply.
Investment vehicles
Taxable joint brokerage account (Schwab Teen Investor™ Account)
Investment options
ETFs, mutual funds, fixed-income products (such as U.S. Treasury Bills and bonds), fractional shares, and Schwab Investing Themes (curated investments in specific sectors like cybersecurity or AI)
Educational resources
Teens get access to an education series covering four themes: personal finance essentials, Investing 101, how to invest in stocks, and how to trade at Schwab, plus ongoing access to Schwab's education hub with videos and articles for investing beginners.
Pros
- No account minimums or monthly fees
- Educational investing resources tailored for teen investors, including a New Investor Content Hub and an interactive “Quick Start to Stock Investing” course
- Joint account structure gives parents full visibility into all transactions, statements, trade confirmations and account activity, with the ability to set up alerts for trading activity and money transfers
- Teen debit card available; parents can set up spending alerts and must be the ones to open or close the debit card account
- Parent does not need to already have an existing Schwab account to open one for their teen
- 24/7 access to Schwab professionals by phone or chat
Cons
- Only available to teens aged 13 to 17
- Debit card won’t be issued until a $100 funding requirement is met
529 college savings plans
Who's this for? 529 college savings plans are state-sponsored savings accounts that let parents and other adults make after-tax contributions. The money grows tax-free and, if used for qualified educational expenses, withdrawals are also tax-free. Best of all, you don't have to live in the state that sponsors the 529 plan you choose.
Standout benefits: If your child doesn't need the money, it can be transferred to another child, grandchild, or parent. Up to $20,000 from a 529 plan can be used on tuition and other qualified expenses for elementary, middle, or high school. Depending on the state, up to $35,000 in unused 529 funds can be rolled into a Roth IRA.
What to know: 529 contributions are not tax-deductible on the federal level, but you may get a state income tax deduction or credit if you choose the 529 plan your state offers. Money in a 529 plan is considered a parent asset and has a limited impact on financial aid calculations.
Michigan Education Savings Program (MESP)
Minimum opening balance
$25, or $15 per pay period via payroll deduction
Maximum overall contribution
$500,000
Portfolio options
Investors can choose from enrollment year-based, multi-fund investments, single funds or the guaranteed fund option
Underlying funds
A mix of funds from Schwab, TIAA-CREF and Vanguard
Fees and expenses
Total asset-based expense ratio: 0.065% to 0.185%
Terms apply.
Pros
- Available to residents of any state
- Offers low fees
- Diverse investment options
- Tax benefits for residents
- Offers gifting platform where givers can save their profile for future contributions
Cons
- Minimum opening balance, but it’s low
- Performance is lower than others on list
Invest529 (Virginia)
Minimum opening balance
$10
Maximum overall contribution
$550,000
Portfolio options
Options include target enrollment portfolios (also known as age-based portfolios), index portfolios, target risk portfolios, principal protected portfolios and specialty portfolios
Underlying funds
Investors can choose funds from Vanguard, Invesco, Blackstone, UBS and more
Fees and expenses
Total asset-based expense ratio: 0.0% to 0.569%
Terms apply.
Pros
- Available to residents of any state
- Offers low fees
- Diverse investment options
- Tax benefits for residents
Cons
- Minimum opening balance, but it's low
- Expense ratios may be higher compared to other providers on our list
- Doesn't offer online gifting portal for easy sharing
Trump Accounts (530A accounts)
Who's this for? A provision of the One Big Beautiful Bill Act, "Trump Accounts" (formally known as 530A accounts) are tax-deferred savings vehicles that function similarly to custodial IRAs. Parents (or anyone else) can contribute up to $5,000 per child per year until age 18, at which point the account converts to a traditional IRA and is under the child's full control.
"Trump Accounts are going to have the most utility for wealthier families who have already put money into 529s and have maxed out their retirement funds," Michael Green, a North Carolina-based wealth advisor with Apollon Wealth Management, told CNBC Select. "This provides another tax-advantaged 'bucket' to put money into."
Standout benefits: Employers may contribute up to $2,500 per employee annually, though these contributions count toward the $5,000 annual limit. A $1,000 government-funded deposit is available for children born between Jan. 1, 2025, and Dec. 31, 2028.
What to know: Before the child turns 18 (i.e., the "growth period"), money cannot be withdrawn from a Trump Account for any reason. After age 18 and before age 59½, withdrawals are subject to ordinary income tax and a 10% early withdrawal penalty, unless they're used for higher education, first-time home purchase or other exemptions (some of which are still to be determined).
Coverdell ESAs
Who's this for? A Coverdell Education Savings Account (ESA) is another tax-advantaged way to invest in your child's education. Unlike a 529 plan, however, there are income limits: The cap for individual filers is a modified adjusted gross income (MAGI) of $110,000, while the limit for married couples filing jointly is $220,000.
Standout benefits: Money grows tax-free, and withdrawals used for qualified expenses for elementary, secondary, or higher education are also tax-free. Parents can open an ESA at a bank, credit union or brokerage, and investment choices include stocks, bonds, mutual funds, REITs and ETFs.
What to know: Contributions are capped annually at a total of $2,000 per beneficiary and funds must generally be used by the time the beneficiary turns 30. Otherwise, earnings are subject to income tax and a 10% penalty. (Unused balances can be rolled over to another family member under 30.)
Custodial Roth IRAs
Who's this for? A custodial Roth IRA is a tax-advantaged retirement account that an adult (often a parent) can open and manage for a child. The beneficiary must have earned income, so it's best for older kids with a part-time job.
Standout benefits: As with a normal Roth IRA, contributions are already taxed and can be withdrawn at any time, penalty-free. Once the child is of age (18 or 21, depending on the state), they'll take over as custodian of the account.
What to know: As with a regular Roth IRA, withdrawing earnings comes with a 10% penalty, but there are qualifying exceptions — including education, the birth of a child and the purchase of a first home.
UGMA/UTMA custodial accounts
Who's this for? An adult can open and manage a Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) custodial brokerage account until the beneficiary reaches adulthood (18 to 25, depending on the state). Anyone can contribute and, unlike 529 accounts, the funds don't have to be earmarked for education.
Standout benefits: UGMA and UTMA custodial accounts don't have contribution or income limits. Contributions can be invested in cash, stocks, bonds and (in the case of UTMAs) real estate.
What to know: Contributions are not tax-deductible, and because the funds are in the minor's name, they are counted as student assets for federal financial aid eligibility.
Comparing investment account options for kids
| Account type | Contribution limit | Use | Investment options | |
|---|---|---|---|---|
| Brokerage account | None | Anything | Mutual funds, stocks, ETFs | |
| 529 college savings plan | Varies by state plan. Liimits are typically high enough to cover the full cost of college | Higher education, although $20,000 can be used for qualifying expenses for K-12. Up to $35,000 in unused 529 funds can be rolled into a Roth IRA. | Mainly ETFs and mutual funds | |
| Trump Account | $5,000 per year (including $2,500 employer contribution) | Retirement. Earnings can be used penalty-free on major milestones, like higher education or a down payment on a first home. | low-cost mutual funds and ETFs pinned to a broad U.S. equity index like the S&P 500 | |
| Coverdell ESA | $2,000 per year per beneficiary. (Eligibility phases out depending on MAGI) | K-12 or college expenses | Extensive, including individual stocks, bonds, mutual funds, REITs and ETFs | |
| Custodial Roth IRA | For 2026: $7,500 or 100% of the child’s total earned income for the year. | Retirement. Earnings can be withdrawn penalty-free for qualifying exceptions, including education, home purchase and birth/adoption | Stocks, bonds, mutual funds, ETFs, REITs | |
| UGMA/UTMA custodial accounts | None | Anything | Cash, stocks and bonds; real estate (UTMA accounts only) |
What kind of account should I open for my child?
The best account to open for your child should align with your family's goals.
- To teach them about investing: a teen-owned or joint brokerage account.
- To fund their education: a 529 CSA or Coverdell ESA
- To grow their retirement fund: a Trump Account or a custodial Roth IRA
- For any use: a UGMA or UTMA custodial account
How will an investment account for my child affect their financial aid for college?
How an account affects your child's eligibility for federal financial aid depends largely on who owns it. In the FAFSA formula, student-owned assets — like a Fidelity Youth Account or Trump Account — are generally assessed at up to 20% of their value. Parent-owned assets, such as 529 college savings accounts, are only assessed up to 5.64% of their value.
Retirement accounts, including custodial Roth IRAs, are not reported as assets on FAFSA.
Pros and cons of investment accounts for kids
- Money has more time to grow, thanks to decades of potential compounding before your child needs it
- Many accounts offer tax advantages, like tax-free growth or tax-deferred contributions
- Some accounts let kids actively trade and manage investments, which allows for building financial literacy early
- Options exist for nearly any goal, from education to retirement to general savings
- Family and friends can contribute to most accounts, not just parents
- Funds in a child's name can reduce eligibility for federal financial aid
- Many accounts restrict how and when the money can be used, with penalties for early or non-qualified withdrawals
- Contribution limits and income caps apply to several account types
- Once money is transferred into a custodial account, it legally belongs to the child and can't be reclaimed
- Choosing the right account requires weighing tax benefits against flexibility, since few accounts offer both
FAQs
Who can open an investment account for a child?
In most cases, a parent or legal guardian can open and manage an investment account for a minor. Some accounts, like 529 college savings plans, can be opened in the child's name by a grandparent or other authorized adult
Can you open an IRA for a child?
Parents or other adults can open a custodial Roth IRA for a minor, provided the child earns income. The child becomes the account holder when they turn 18 or 21, depending on the state. As with traditional Roth IRAs, contributions are made after taxes and grow tax-free. Contributions can be withdrawn at any time, although investment gains withdrawn before 59½ are subject to income tax and a 10% penalty.
Is my child's investment income taxed?
Whether your child's investment income is taxed depends on the “Kiddie Tax” rule. If they have no earned income and their investment income is less than $1,350, it's not taxed. The next $1,350 of unearned income is taxed at the child's rate and anything above $2,700 is taxed at the parent's rate.
Parents may be able to include their child's investment income on their own return, depending on how much income their child earned.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every investment account list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of investment products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best investment accounts.
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