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

confirmation_icon

This custodial account is:

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

Other accounts to consider:

 
  • For saving for college 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 greater flexibility transferring money at an age you choose (generally up to 35), consider a trust through our Personal Trust Services

Our brokerage accounts include everything Fidelity has to offer

Guidance and education

Make the most out of your financial life with easy-to-use tools and the latest insights from our team of specialists.

Straightforward pricing

$0 commissions on stocks, ETFs, and options trades plus zero account fees, zero minimums to invest, and zero expense ratio mutual funds.

Broad choice of investments

Access our full range of investments, including stocks, options, mutual funds, bonds, CDs, and fractional shares.

Custodial account features


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? Anyone can contribute to a custodial account, including parents, grandparents, friends, and other family. This makes it useful as gifts for major milestones and celebrations.
Are there contribution requirements? There's no maximum contribution limit. There's also no minimum to open an account, through 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 $15,000 per individual ($30,000 for a married couple) can be contributed free of gift tax in 2020.
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.


Education savings options


Understand the differences between a 529, custodial account, and education savings plan.


Planning & Guidance Center


Get help saving and investing.