Custodial account

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

Why open a custodial account (UGMA/UTMA)

A custodial account can be a great way to save on a child's behalf, or to give a financial gift. Otherwise known as an UGMA/UTMA account, there are no income or contribution limits—and no early-withdrawal penalties or restrictions on how the funds are used for the child. Basically, these are easy-to-open accounts used to invest in stocks, bonds, mutual funds, and more—all to give a child a better future.

Things to consider

  • Great way to directly transfer wealth 
  • Transferred to the minor at a certain age (between 18 and 25, depending on the state)
  • Friends and family can contribute 
  • A portion of earnings may be exempt from federal taxes 
  • Factored into financial aid eligibility

Why save and invest at Fidelity


Industry-leading value

$0 commissions for online stock trades—plus no account fees or minimums to invest.

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One-stop shop

Save for a child’s needs with our account and planning options.

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Lessons for life

Teach a child money lessons to last a lifetime with our focus on education.

Ready to transition ownership?

See the deadline for transferring ownership when your child (or minor) reaches adulthood in their state—and quickly change the account registration using our simple online form.

Learn more

Saving a little over time can go a long way toward a child’s future*

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Already have a custodial account?

Contribute today, with no annual contribution limit. Transfer in either after-tax money or shares from an outside account.

Common questions on a custodial account

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How can a custodial account be used to to help educate a child about saving and investing?

With a custodial account, you can explain that the money belongs to the child and that you, as the custodian, are saving and investing for them until they reach adulthood. By showing a child the investment mix, types of assets, and performance reports, you can educate them about investing until the account becomes theirs.

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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. Individuals can contribute up to $18,000 free of gift tax in 2024 ($36,000 for a married couple). There's also no minimum to open an account, though certain investments may require a minimum initial investment.

Additional account types to consider
From a 529 college savings plan to a Fidelity Youth™ Account, you have options.

Ready to get started?

Must-know facts about UGMA/UTMA accounts

Read our Viewpoints article to learn the ins and outs on how custodial accounts work.

Custodial account FAQs