Custodial account

Plan for a child's future by saving and investing on their behalf.

What is a custodial account?

A Fidelity custodial account, sometimes called a UTMA/UGMA account, is a brokerage account for investing in stocks, bonds, mutual funds, and more. It can be a great way to save on the child's behalf, or to give a financial gift. The money in this account belongs to the child.

How to decide if this account is right for you


This custodial account is:

  • Considered the minor's asset
  • Transferred to the minor at a certain age (between 18–25)
  • Funded with after-tax money (or by transferring shares), though there are tax benefits
  • A brokerage account for investing
  • Factored into financial aid eligibility
  • A way to directly transfer wealth

Other accounts to consider:

  • For saving for education with special tax benefits, consider a 529 account
  • For getting an early start on the child's retirement savings, consider a Roth IRA for Kids
  • For educating your teen about saving, spending and investing, consider a Fidelity Youth Account
  • For greater flexibility transferring money at an age you choose (generally up to 35), consider a trust through our Personal Trust Services

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Custodial account FAQs

  • When must a custodial account be transferred?
    Custodians have to transfer the account to minors by the age of termination. In many states, it's the age of 18, but it may be as late as 25. If you choose an age of termination greater than 21, there are important tax considerations that should be evaluated. Consult an attorney or tax advisor to discuss your options.
  • Who can contribute to a custodial account and are there limits?
    Anyone can contribute to a custodial account — parents, grandparents, friends, other family — with no contribution limits, making them valuable gift opportunities for major milestones and celebrations. There's also no minimum to open an account, though certain investments may require a minimum initial investment.
  • What are the tax benefits of a custodial account?
    A portion (up to $1,100) of any earnings from a custodial account may be exempt from federal income tax, and a portion (up to $1,100) of any earnings in excess of the exempt amount may be taxed at the child's tax rate, which is generally lower than the parent's tax rate. Up to $16,000 per individual ($32,000 for a married couple) can be contributed free of gift tax in 2022.
  • When can I make withdrawals?
    Withdrawals can be made at any time but must be for the benefit of the minor.

Next steps

Read more on Viewpoints

Must-know facts about UGMA/UTMA accounts.

Compare saving for a child options

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