How to Open a Custodial Account for Your Kid: A Step-by-Step Guide

MemoryBank is the window — the dashboard your kid actually looks through to watch their money grow. But the money itself has to live somewhere: a real brokerage account, in your child's name, opened at a brokerage. If you've never opened one of these, that last sentence can sound like a wall. It isn't. This is the on-ramp.

Below is the whole path, start to finish: what you're actually opening, what to have ready, how to open it, how to fund it, and how to connect it so your kid can see it. Most parents finish the account itself in about 15 minutes.

First, a 30-second primer on what you're opening

A custodial account is a brokerage account opened in a child's name that a parent (or any adult) manages until the child reaches the age of majority — 18 or 21 in most states. The most common flavor is a UTMA (Uniform Transfers to Minors Act) account. The money is legally the child's from day one; you're the custodian, making the decisions until they're old enough to take over.

If you want the full breakdown of how UTMAs work — taxes, control transfer, the tradeoffs — read UTMA Accounts Explained. For most families opening their first account for a kid, a custodial brokerage account is the simplest place to start. (Two alternatives worth knowing: if your child has earned income, a custodial Roth IRA adds tax-free growth; if you're saving strictly for college, a 529 plan is built for that. You can always add those later — and hold all of them in MemoryBank.)

Why we point families to Schwab

Plenty of major brokerages offer custodial accounts at no cost, and any of them will work with MemoryBank. But we point MemoryBank families to Charles Schwab specifically, for two honest reasons:

1. It's where this started. Schwab is where we opened the very first custodial accounts for our own kids — the accounts that became the reason MemoryBank exists at all. We're recommending the path we actually walked.
2. A Schwab custodial account is a clean custodian. It holds the money and stays out of the way. There's no separate kid-facing app pulling for your child's attention — which means MemoryBank stays the one window your kid looks through. That keeps the experience simple: the brokerage is the vault, MemoryBank is the view.

The Schwab product you want is called the Schwab One® Custodial Account. It has no account minimum, no maintenance fees, and supports fractional shares — so even a $20 starter deposit can buy a sliver of a real fund.

What to have ready (about 5 minutes of prep)

Before you start the application, gather:

• Your information — Social Security number, date of birth, address, and contact details. You're the custodian.
• Your child's information — their Social Security number and date of birth. The account is in their name, under their SSN, because the money (and the tax reporting) is theirs.
• A bank account to fund from — routing and account number, or your online banking login for an instant link.
• About 15 minutes of uninterrupted time.

The one item that trips parents up is the child's Social Security number — if you don't have it yet (common for a newborn), that's the thing to sort first. Our Newborn Money Checklist walks through getting it.

Opening the account, step by step

1. Go to schwab.com/custodial-account and start a new Schwab One Custodial Account. You don't need an existing Schwab login — you can create one as part of the flow.
2. Enter yourself as the custodian and your child as the beneficiary. Schwab will ask for both sets of details you gathered above.
3. Pick your state's custodial registration when prompted (Schwab handles the UTMA/UGMA specifics based on where you live).
4. Review and electronically sign. There's no minimum deposit required to open, so you can finish the application even before you fund it.
5. You'll get an account number on the spot. That's the account you'll later connect to MemoryBank.

Funding it

Once the account exists, link your bank inside Schwab and transfer a starter amount. A few pointers parents tend to appreciate:

• Start modest. There's no minimum — even $25 gets the account live and gives your kid something to watch. You can always add more.
• Automate it. A small recurring monthly transfer does more over 18 years than a big one-time deposit you have to remember. This is the habit that compounds — see Compound Interest for Kids.
• Gifts welcome. Grandparents can contribute to the same account. Contributions are irrevocable gifts to the child, which is exactly the point.

Putting the money to work

Funding the account just parks cash in it — the next step is choosing what to buy. What you invest in is entirely your call (or a conversation with your financial advisor); MemoryBank and this guide don't make that choice for you. If the building blocks are unfamiliar, What Is an ETF? explains the low-cost, broad-market funds many parents use as a single, simple holding. Schwab supports fractional shares, so you can put a round dollar amount to work without worrying about share prices.

Connecting it to MemoryBank

This is the part that closes the loop. Once the account is open and funded, link it in MemoryBank, assign it to your kid, and the balance shows up in a dashboard they can understand — their holdings, their growth, their account. The whole reason to open it young is so your child grows up watching it, not discovering it as a surprise at 18.

Common questions

Does it cost anything to open or keep? A Schwab One Custodial Account has no account minimum and no maintenance fee. You only put in what you choose to contribute.

Whose Social Security number goes on it? Your child's. The account is in their name and the yearly tax reporting follows their SSN — even though you control it as custodian.

What happens when my kid grows up? Control transfers to them at the age of majority (18 or 21, depending on your state) and the account becomes fully theirs. We cover exactly what that handoff looks like in What Happens When Your Child Turns 18.

Can I open one for each of my kids? Yes — each child gets their own custodial account under their own SSN. Siblings can't share one. MemoryBank shows them all side by side.

What to do this week

1. Confirm you have your child's Social Security number (sort it first if not).
2. Set aside 15 minutes and open a Schwab One Custodial Account.
3. Link your bank and fund it with a starter amount — whatever feels comfortable.
4. Decide on a small recurring monthly contribution (even $25 counts).
5. Connect the account in MemoryBank so the actual owner — your kid — can watch it grow.