For U.S. residents only: To open an account for someone under the age of 18, set up a custodial account.

A custodial account is one set up by an adult for the benefit of a minor and can be an excellent way to make a financial gift to any child. An adult (18+) will be the custodian and the minor will be the beneficiary.

Any adult (even if unrelated) can open a custodial account for a child (e.g. a relative or friend's child). To get started, all you need is:

We support two custodial account types: Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA). Custodial accounts do not support shorting, margin, or pattern day trading. As the custodian, you help manage the account until the minor reaches the appropriate age in your state/region.

In most U.S. states, the age of majority (when the minor has total control of the account) is 21 years of age. For California, District of Columbia, Kentucky, Louisana, Maine, Michigan, Nevada, Oklahoma, South Carolina, South Dakota, Virgin Islands, and Virginia, the official age is 18 years old. For Vermont, the age of majority is 19.

It is important to note that all assets in a custodial account are irrevocably owned by the beneficiary (i.e. the minor) at all times.

Custodial accounts are a great way to educate children about money, taxes, and investing. Gains are subject to kiddie tax. Additionally, unlike 529 accounts which are for qualified educational expenses only, they offer more flexibility. Learn more about custodial vs 529 accounts here.