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  • Keallah Smith

A Custodial Brokerage Account: The Gift That Keeps Growing


Someone tagged me on a post on social media for someone who posed the question:

"What do you get the kid that has everything?"

The simple answer is, get them a Custodial Brokerage Account. The term 'Custodial' means that it's a minors account that will be co-owned with a parent/guardian. When the minor reaches either 18 or 21 (depending on the state), the account will be 100% theirs. A 'Brokerage Account' is just an investment account that is not designated for retirement. So when you open this account for a child, you can begin to buy stocks or mutual funds that will grow over time. There are no rules or regulations on how often you have to contribute. I suggest creating a regular contribution schedule such as a dollar amount monthly, even if it's a small amount.


What Are the Benefits

Wealth Building. It's as simple as that. But let me share why each of my kids (yes, the toddler up to the teenager) has an account which we actively manage. My hopes are that my kids can take these funds to jumpstart their life. What I mean is...use these funds to:

- Buy a Home or a Rental Property (PASSIVE INCOME!)

- Start a Business

- Travel the World

- Pursue Spiritual Goals Debt Free

-Financial Freedom!


Financial Freedom

My parents provided me with many things, including lots of practical knowledge. But one thing I did not have, was a lump sum of money to jump start my life. I can only imagine where I would be if I had money to buy a few rental properties at 21 and/or cash to start a business and work when I wanted.



Where to Open

When teaching my Financial Literacy for Kids course, I always provide them with how the stock market works, how to select stock, which types of accounts they qualify for as well as where they can go to open their first account. Here are my top 4 brokerage companies.

- E*Trade

-Charles Schwab

-TD Ameritrade

-Merrill, A Bank of America Company



How old do you have to be to Open the Account?

Any age! As long as your child has a social security number, you can open up their Custodial Brokerage Account. Think about the future you envision for your little ones and think about how you can begin to help them finance those dreams by opening up their Custodial Brokerage Account.


It's A Family Affair

Get the entire family involved. Think about how $50 gifted to your child's Custodial Brokerage Account can be more beneficial than a $50 toy that may get very little use 2 weeks from now. I think about all of the STUFF that has been given to our kids over the years. What if friends and relatives provided money for stock instead? The Custodial Brokerage Account is truly the gift that keeps growing!

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