How to Gift Stock to a Child

Giving stock to a child can turn a birthday or holiday gift into something that grows with them.

But you usually can't send shares directly to a child. The stock needs somewhere to go — typically a custodial investment account managed by an adult.

The short version

There are three common ways to gift stock to a child:

• Transfer shares you already own into the child's custodial account.
• Add cash to a custodial account and buy the stock there.
• Use a stock-gifting service that handles much of the process for you.

If the child already has a custodial account, all three get much easier.

1. Transfer stock you already own

If you already own the shares, your brokerage may let you transfer them directly into the child's custodial account.

You'll need the receiving account information and details about the custodian. Your brokerage can tell you what forms are required.

One thing to know: gifted shares generally keep the giver's original cost basis. If you bought a stock for $20 and it was worth $100 when you gifted it, that $20 basis carries over. It affects taxes when the investment is eventually sold, not on the day you give it.

More on that in gifting appreciated stock and gift tax and custodial accounts.

2. Add cash and buy the stock

For parents, this is often the simplest option.

If the child already has a custodial investment account, you can contribute money and purchase the investment directly inside it. There's no stock transfer and no receiving account to coordinate.

3. Use a stock-gifting service

Some companies specialize in giving stock as a gift. They may let you choose a company, purchase a share or fractional share, and give the child something physical or digital to open.

These services can cost more than buying through a brokerage. But they make the gift easier to give and more exciting for a child to receive.

What do you need first?

Before you start, you'll generally need:

• A custodial investment account — if there isn't one, someone has to open one first
• The child's identifying information, including their Social Security number
• An adult custodian to manage the account

Giving stock to someone else's child? Talk to their parents first. They may already have an account you can contribute to.

Don't forget the kid

Here's the problem with giving a seven-year-old stock: they usually can't see it.

The investment sits inside a brokerage account while the child has little idea what they own or what it's doing.

Show them the companies they own. Show them what their investments are worth. Let them watch the value change over time. That's how a financial gift becomes a financial lesson, and it's why we built MemoryBank — it connects to accounts you've already opened and gives kids a simple way to see their money grow. Showing a child their account is a separate act from funding it.

Can you gift stock through MemoryBank?

No. MemoryBank is not a brokerage. It cannot receive, keep or transfer securities.

Stock purchases and transfers happen through your brokerage or financial institution. MemoryBank comes in afterward, giving your child a simpler way to see and understand what they own.

If you want to give something through MemoryBank itself, that's a gift plan — a paid subscription that arrives as a redemption code and a printable card.

The bottom line

Gifting stock doesn't have to be complicated.

If a custodial account already exists, you can either transfer shares you own or contribute money and buy an investment inside the account. If it doesn't, start there, and give yourself more time than feels necessary.

Then comes the part that matters most: show your child what they own. A small investment they watch grow for years may teach them more about money than a much larger gift they never see.

If you're working toward a particular occasion, the timing and the options differ a little by event: Christmas, graduation, and a new baby.

Frequently asked questions

Can you gift stock directly to a child?

Not directly. The shares need an account established for the child, usually a custodial brokerage account, with an adult managing it until the child reaches the transfer age set by their state. You can transfer shares you already own into that account, add cash and purchase shares inside it, or use a gifting service that opens an account on the child's behalf.

Can I gift stock through MemoryBank?

No. MemoryBank is not a brokerage and cannot receive, keep or transfer securities. Share purchases and transfers happen at a brokerage or transfer agent. MemoryBank connects to accounts that already exist so a child can see what they own. You can gift a MemoryBank plan, which is a paid subscription delivered as a redemption code and a printable card.

Can grandparents gift stock to grandchildren?

Yes, but usually not on their own. A parent or guardian normally has to be the custodian on the account, so start by asking whether one already exists. If it does, contributing to it is the simplest route. If it doesn't, opening one is the parents' decision.

Does a child pay tax on gifted stock?

Receiving shares generally isn't taxable income to the child. Gifted shares carry over the giver's original cost basis, so any gain travels with them and tax arises when the shares are eventually sold. Investment income the account earns along the way can also fall under the kiddie tax rules. Larger or highly appreciated gifts are worth running past a tax professional.

How long does it take to gift stock to a child?

Purchasing inside an existing custodial account can be same-day. Transferring shares between brokerages typically takes weeks, and longer if the receiving account has to be opened first. A gifting service usually lands in between. If there's a date attached to the gift, don't leave it until the week before.

Is it better to gift stock or cash to a child?

It depends on the goal. Cash is simpler and immediate. Shares give the child an investment they can follow over time, and they carry the giver's cost basis with them, which has tax consequences worth understanding first. Many families contribute cash to an account that already exists and purchase the investment there, which avoids the transfer paperwork entirely.