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.
Key takeaways
- You'll need the grandchild's Social Security number, which usually means looping in the parents.
- With a UTMA, one person is custodian and controls the account until the age of majority.
- The paperwork is straightforward — coordinating with the parents is the real work.
Opening an investment account for a grandchild is mostly straightforward — the main wrinkles are paperwork and coordinating with the parents. Here's exactly what to expect. (Still deciding which account to open? Start with Saving and Investing for Grandchildren.)
What you'll need
The grandchild's Social Security number, their basic details, and a way to fund the account. If you don't have the SSN — common for grandparents — you'll need to loop in the parents, since it's required to open a custodial or 529 account in the child's name.
Who controls the account
- UTMA (custodial): one person is the custodian who manages it until the child grows up. A grandparent can be the custodian, but many families have the parent serve as custodian while the grandparent funds it.
- 529 plan: the grandparent can own and control the account outright, naming the grandchild as beneficiary.
The five steps
- Decide the account type — a 529 for education with your control, a UTMA for flexibility, or a custodial Roth if the grandchild has a job. (See the 529 vs. UTMA comparison if you're unsure.)
- Pick a brokerage or 529 plan.
- Open the account online — about 15 minutes with the child's information. The full walkthrough is in How to Open a Custodial Account.
- Fund it, and ideally set up a small recurring contribution so it grows steadily.
- Connect it so the family — and the grandchild — can watch it grow.
A note on family harmony
Because these accounts involve the child's information and sometimes the parents' role as custodian, a five-minute heads-up to the parents avoids surprises — and often turns the whole thing into a shared family effort rather than a solo surprise.
Frequently asked questions
Can a grandparent open an investment account for a grandchild?
Yes. A grandparent can open a UTMA custodial account (as custodian, or funding one the parent manages) or a 529 plan they own outright with the grandchild as beneficiary. If the grandchild has earned income, a custodial Roth IRA is an option too.
Do I need my grandchild's Social Security number?
Yes — an SSN is required to open a custodial account or name a 529 beneficiary in the child's name. Most grandparents don't have it on hand, which means looping in the parents before you start.
Can I open an account for my grandchild without the parents' involvement?
In practice, rarely — you'll need the child's SSN from the parents, and for a UTMA many families prefer the parent to serve as custodian anyway. The exception is a 529 you own yourself, but even that requires the grandchild's SSN. A five-minute heads-up call is the smoothest path.
Who controls an account opened for a grandchild?
It depends on the account. A UTMA has one custodian — you or a parent — managing it until the child reaches the age of majority, when it becomes the grandchild's outright. A 529 stays under the owner's control indefinitely; the grandparent can own it and simply name the grandchild as beneficiary.
Which account type is best for a grandchild?
It depends on the goal: a 529 for education with the grandparent keeping control, a UTMA for maximum flexibility, or a custodial Roth IRA for long-term tax-free growth if the grandchild has a job. The side-by-side comparison — including the tax and financial-aid angles — is in Saving and Investing for Grandchildren.
MemoryBank is an education and display tool that connects to the account you open — not a broker or a financial advisor. Confirm account and tax specifics with the provider or a professional.
Written by Josh Ackerman
Founder of MemoryBank. A computer scientist and M.B.A. with 20+ years of investing and technology experience, Josh built the first MemoryBank in his basement so his three kids could watch their own accounts grow. More about Josh →
See it in one place
MemoryBank shows your kid's UTMA, 529, Roth IRA, brokerage, and savings in one place — across every institution — and explains their accounts and how investing works in age-appropriate terms they actually understand.
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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.