Brokerage Accounts for Kids: Custodial vs. Regular (and How to Choose)
A brokerage account holds the investments — the real question is which kind for a kid. Custodial vs. Roth vs. regular, costs, and how to open one.
A brokerage account is simply the account that holds investments — stocks, ETFs, and funds — and lets you buy, hold, and sell them. For a kid, the question usually isn't whether to open a brokerage account, but which kind.
The three options for a child
| Account | How it works | Whose money it is |
|---|---|---|
| Custodial brokerage (UTMA) | An adult manages it until the child reaches the age of majority, then it's theirs | The child's |
| Custodial Roth IRA | A retirement-flavored account with tax-free growth; needs the child to have earned income | The child's |
| Regular (individual) account | In a parent's own name, earmarked for the kid; more control, different taxes | The parent's |
Most families teaching a kid to invest start with a custodial brokerage account (a UTMA): low friction, no earned-income requirement, and the money is truly the child's. Then they add a custodial Roth once a teen has a job, for the tax-free growth.
What about costs?
Good news: most major brokers now charge no commission to buy or sell stocks and ETFs, and many offer fractional shares so you can start with just a few dollars. The cost actually worth watching is a fund's expense ratio — keep it low — not trading fees.
This explains how the account types work, not what to buy — MemoryBank is an education and display tool, not a broker or a financial advisor.
How to open one
It takes about 15 minutes online. You'll typically need the child's Social Security number and basic details, plus a way to fund it. The full step-by-step lives in How to Open a Custodial Account.
One thing to plan for
With a custodial account (UTMA), the money legally becomes the child's at the age of majority — that's a feature, but one worth preparing them for well before the day arrives. Here's what happens when your child turns 18.
What to do this week
- Decide the goal: flexible growth (UTMA), retirement with a working teen (Roth), or parental control (regular).
- Pick a broker with no stock/ETF commissions and fractional shares.
- Open the account — it's about a 15-minute task.
- Connect it to MemoryBank so your kid can actually watch it grow.
See it in one place
MemoryBank shows your kid's UTMA, 529, Roth IRA, brokerage, and savings — across every institution — in a dashboard they can actually understand.
Related guides
How to Open an Investment Account for a Grandchild
The practical how-to: what you need, the SSN wrinkle, who should be custodian, and the five steps to open and fund an account for a grandchild.
UTMA vs. UGMA: What's the Difference (and Which One You Actually Have)?
Two flavors of custodial account, constantly confused. The one real difference — and why almost everyone opens a UTMA.
What Can UTMA Money Actually Be Used For? The Withdrawal Rules, Explained
The 'benefit of the child' rule, what clearly qualifies, the traps to avoid, and what changes at the age of majority.
MemoryBank is a display and education tool, not a financial advisor. Nothing here is investment, tax, or legal advice. Verify program details with the IRS, your tax advisor, or a licensed financial professional before making decisions.