Custodial account options compared in 2026 include Fidelity, Charles Schwab, Ally Invest, Greenlight, Acorns Early, Alpaca, and Vanguard, with Ark7 available as a complementary option for families who want to add fractional rental real estate shares starting at $20 alongside a household’s long-term investment mix.
- Fidelity – commission-free custodial brokerage account with no minimum deposit or maintenance fee
- Ally Invest – self-directed trading, robo portfolios, and IRAs with no account fees
- Greenlight – debit and checking account for kids and teens with a parent-directed investing feature
- Acorns Early – UTMA/UGMA custodial account that automatically invests additions into a diversified portfolio
- Alpaca – custodial account infrastructure delivered through a broker API for business partners
- Ark7 – fractional rental real estate shares starting at $20, with monthly distributions paid to investor accounts (complementary real-estate option, not a traditional custodial brokerage)
| Platform | Minimum Investment | Asset Class / Product Type | Passive Income / Distributions |
|---|---|---|---|
| Ark7 | $20/share | Fractional rental real estate shares | Monthly rental distributions to account |
| Fidelity | $0; fractional shares from $1 | Stocks, ETFs, crypto, IRAs, college savings, wealth mgmt | Not published |
| Charles Schwab | $0 (Schwab One brokerage) | Stocks, ETFs, options, futures, forex, IRAs, automated investing | Not published |
| Ally Invest | $0 (Self-Directed) | Stocks, ETFs, options, forex, IRAs, robo portfolios | Not published |
| Betterment | $0 (Investing); $100,000 (Premium) | Diversified ETF portfolios (robo-advised); IRAs | Not published |
| Greenlight | Not published | Debit/checking (kids and teens); banking, not brokerage | Not published |
| Acorns Early | Not published | Diversified investment portfolio (custodial UTMA/UGMA) | Not published |
| Alpaca | Not published | Stocks/ETFs via Broker API (UGMA/UTMA custodial) | Not published |
| Vanguard | $3,000/fund (Cash Plus money market) | Money market funds; bank sweep (Cash Plus savings alternative) | Not published |
Parents evaluating custodial investment platforms are usually juggling two questions at once: which brokerage actually supports a UGMA or UTMA account, and whether that account is the right tool at all compared with a 529 plan or a diversified family portfolio. The rest of this guide walks through both.
Key Takeaways
- Young investors are entering markets earlier. The share of 25-year-olds using retail investment accounts reached 37% in 2024, compared with 6% in 2015.
- Non-retirement investing is common but not universal. In 2024, 34% of U.S. adults held investments outside retirement accounts.
- Managed investment programs keep scaling. Industry-wide managed account assets grew 19.8% in 2024, reflecting broader demand for professionally structured accounts.
- Custodial accounts have no contribution ceiling. FINRA confirms UGMA and UTMA accounts carry no contribution limits, though large gifts can trigger IRS reporting.
- Fee structures vary widely by platform type. Full-service brokerages often charge no account fees, while kid-focused banking apps charge monthly subscriptions instead.
- Families increasingly look beyond stocks and ETFs for a child’s portfolio. Real assets like rental property shares are one way to add income-producing diversification alongside a standard custodial brokerage account.
New to passive real estate investing?
Explore Ark7 OpportunitiesWhat Is a Custodial Account and How Does It Work?
A custodial account is a brokerage account an adult manages on behalf of a minor beneficiary until the child reaches the state’s age of majority. FINRA describes UGMA and UTMA accounts as custodial vehicles that transfer assets to minors without requiring a formal trust, under model laws developed by the Uniform Law Commission. The donor appoints a custodian, names the minor as beneficiary, and deposits assets into the account.
StockBrokers.com similarly defines a custodial account as a legal vehicle that allows an adult to hold and manage assets for a minor beneficiary. Under FINRA’s description of the legal structure, the minor generally becomes the owner of the property when the gift is made, while the custodian keeps investment control until the transfer date arrives. FINRA notes that custodial accounts can generally be opened at brokerage firms, mutual-fund companies, or other financial institutions, which is why the fee structures and investment menus below vary so much.
Why Custodial Investing Is Growing
Interest in custodial and other managed investment structures has climbed alongside broader participation in markets. Section 529 education savings plans, a close cousin to custodial accounts in many family financial plans, held $525.1 billion at the end of December 2024, up 11.45% from year-end 2023. That growth mirrors a wider shift toward structured, professionally managed accounts: Cerulli Associates reports five-year annualized growth rates of 18.7% for unified managed accounts and 18.3% for separate managed accounts.
For families, the practical takeaway is that custodial brokerage accounts are now one option among several for building a child’s financial head start, alongside 529 plans, Coverdell accounts, and increasingly, diversified assets outside of stocks and bonds.
Top Custodial Investment Platforms Compared: Fees, Minimums, and Features
The platforms below range from full-service brokerages with dedicated custodial products to banking apps built around allowance and chores, plus one option families use to diversify a household’s broader portfolio. Minimums, fees, and supported products differ sharply.
| Dimension | Ark7 | Ally Invest | Fidelity | Betterment | Charles Schwab | Greenlight | Acorns Early | Alpaca | Vanguard |
|---|---|---|---|---|---|---|---|---|---|
| Minimum Investment | $20/share | $0 (Self-Directed) | $0; fractional shares from $1 | $0 (Investing); $100,000 (Premium) | $0 (Schwab One brokerage) | Not published | Not published | Not published | $3,000/fund (Cash Plus money market) |
| Monthly / Annual Fee | Not published | $0 account fee (Self-Directed) | $0 account fee | $5/mo or 0.25%/yr (base); 0.65%/yr (Premium) | $0 account fee | $5.99-$19.98/mo (up to 5 kids) | $8/mo (Lite, up to 4 kids); included in $12/mo Gold | Not published | Not published |
| Asset Class / Product Type | Fractional rental real estate shares | Stocks, ETFs, options, forex, IRAs, robo portfolios | Stocks, ETFs, crypto, IRAs, college savings, wealth mgmt | Diversified ETF portfolios (robo-advised); IRAs | Stocks, ETFs, options, futures, forex, IRAs, automated investing | Debit/checking (kids and teens); banking, not brokerage | Diversified investment portfolio (custodial UTMA/UGMA) | Stocks/ETFs via Broker API (UGMA/UTMA custodial) | Money market funds; bank sweep (Cash Plus savings alternative) |
| Commission / Transaction Cost | Not published | $0 on eligible stocks and ETFs (Self-Directed) | $0 stocks, ETFs, options | No per-trade commissions; 0.25%-0.65%/yr advisory fee | $0 online stocks and ETFs; $0.65/contract options; $2.25/contract futures | Not published | Not published | Not published | Not published |
| Passive Income / Distributions | Monthly rental distributions to account | Not published | Not published | Not published | Not published | Not published | Not published | Not published | FDIC-eligible bank sweep plus 5 money market funds |
| Mobile App / Platform Access | Apple App Store, rated 4.7 | Not published | Not published | Not published | Schwab Mobile; thinkorswim desktop/web/mobile; branch locations | Not published | Not published | Broker API (B2B platform, not consumer app) | Vanguard website/app |
| Geographic / Market Coverage | 10 markets (expanding nationally) | Not published | Not published | Not published | Not published | 70,000+ fee-free ATMs nationwide | Not published | UGMA: all 50 states; UTMA: 48 states (excl. SC and VT) | Not published |
Ark7’s $20-per-share entry point reflects a different cost structure than a brokerage commission: it is the price of a direct ownership stake in a property, not a trading fee layered on top of a stock or ETF purchase. The platform’s current footprint of 10 markets also reflects a curated approach to property selection rather than an attempt to cover every metro at once, with national expansion underway.
1. Ark7
Ark7 is a real estate investment platform that lets individuals buy shares in curated rental homes rather than opening a traditional custodial brokerage account. Properties are typically held long-term, and investors can sell shares or hold for appreciation after a minimum holding period.
Ark7 uses a hybrid approach of artificial intelligence and local real estate expertise to source, lease, and manage properties, and the platform states that complete legal and financial disclosure is accessible around the clock with no hidden fees. The company reports 300K+ active investors, $30MM+ in property value funded, and $4MM+ in cash dividends paid, and Ark7 has a 4.7 rating on the Apple App Store. The platform currently operates in 10 markets and is expanding nationally.
For families already managing a child’s custodial brokerage account, Ark7 functions as a complementary way for the parent’s own portfolio to add real estate exposure and income-producing assets, broadening a household’s overall investment mix beyond stocks, ETFs, and cash.
What sets Ark7 apart
- Monthly passive income: investors receive monthly rental distributions paid straight to their account.
- Hybrid sourcing model: artificial intelligence combined with local real estate expertise to hand-pick properties and automate leasing and management.
- Operational transparency: complete legal and financial disclosure is accessible 24/7, with no hidden fees.
- App Store rating: a 4.7 rating on the Apple App Store.
Families weighing a custodial account for a child alongside their own long-term investing often want a way to diversify beyond securities without taking on direct landlord responsibilities, which is the gap Ark7’s share-based model is designed to fill.
How to Open an Ark7 Account
Opening an account involves creating a profile and reviewing available properties before purchasing shares. Browse Ark7’s current property listings to see share pricing and projected monthly distributions before deciding how real estate fits into your family’s broader investment plan.
2. Fidelity
Fidelity provides investing, retirement, health savings, college savings, and wealth management products, including a dedicated custodial account structure. Customers can open accounts and invest in stocks, ETFs, and other products on their own or work with a Fidelity advisor.
Fidelity’s custodial account has no minimum opening deposit, according to Forbes Advisor’s 2026 custodial-account review, and charges no recurring maintenance fees. Per Fidelity’s site, the account also carries no income or contribution limits, no early-withdrawal penalties, and no restrictions on how funds are used for the child, with commission-free trading on stocks, ETFs, and options, and fractional shares available from $1.
Key Features
- No minimum opening deposit for the custodial account.
- No recurring account maintenance fees.
- Commission-free stocks, ETFs, and options.
- Fractional shares available from $1.
- No income or contribution limits on the custodial account.
Pricing
$0 account fees and $0 trading commissions, per Fidelity’s site.
3. Charles Schwab
Charles Schwab offers self-directed investing, active trading, automated investing, and wealth and investment management, including a Teen Investor Account designed for minors. Customers can trade through Schwab.com, the thinkorswim platform, Schwab Mobile, or a branch location, with different commission structures depending on the channel used.
Per Schwab’s site, the Teen Investor Account has no minimum initial deposit, $0 commissions on online listed-equity trades, and no account-opening or maintenance fees. Schwab’s broader brokerage accounts carry $0 online commissions on stocks and ETFs, $0.65 per contract for options, and $2.25 per contract for futures, with no account or trade minimums.
Key Features
- Teen Investor Account with no minimum deposit.
- $0 commissions on online stock and ETF trades.
- Trading access through Schwab.com, thinkorswim, Schwab Mobile, or a branch.
- No account-opening or maintenance fees.
- Automated and self-directed investing options.
4. Ally Invest
Ally Invest offers Self-Directed Trading, Robo Portfolios, and Personal Advice as separate ways to invest. With Self-Directed Trading, customers can access TipRanks’ expert data alongside commission-free trading on eligible stocks and ETFs.
Business Insider’s review of Ally Invest reports that its traditional, Roth, and rollover IRAs carry no annual fees, no monthly maintenance fees, and no transfer fees for rollovers, with no commissions on US-listed stocks, ETFs, and options. Self-directed accounts require no minimums and carry no advisory fees.
Key Features
- Self-Directed Trading, Robo Portfolios, and Personal Advice account types.
- Access to TipRanks’ expert data.
- $0 commissions on eligible stocks and ETFs.
- No account minimums for self-directed accounts.
- Traditional, Roth, and rollover IRA options.
Pricing
$0 account fees; $0 commissions on eligible stocks, ETFs, and options, per Business Insider’s review.
5. Betterment
Betterment does not currently offer custodial accounts, but families comparing platforms often weigh it for the adult side of a household’s portfolio. It is an automated investing platform offering diversified ETF portfolios and several retirement account types, including Traditional IRA, Roth IRA, SEP IRA, 401(k) rollover, and Solo 401(k) accounts. Per Betterment’s site, traditional investment portfolios carry no minimum balance requirement.
Betterment’s base investing fee is $5 per month. The fee drops to an annualized 0.25% once a customer sets up recurring deposits of at least $200 per month or holds at least $24,000 across eligible accounts, per Betterment’s pricing page. Its Premium plan charges 0.65% annually. Betterment lists custodial or minor accounts among the account types it does not currently support, per the company’s own help documentation.
Key Features
- Automated, diversified ETF portfolios.
- Traditional IRA, Roth IRA, SEP IRA, 401(k) rollover, and Solo 401(k) accounts.
- No minimum balance for standard investing portfolios.
- Tiered fee structure based on deposit activity or balance.
Pricing
$5/month or 0.25%/year (base tier); 0.65%/year (Premium), per Betterment’s pricing page.
6. Greenlight
Greenlight is a debit and checking account built for kids and teens that also includes a feature letting parents invest on their child’s behalf within the same app. CNBC’s review notes Greenlight provides access to 70,000+ fee-free ATMs nationwide.
Per Greenlight’s own plans page, pricing ranges from $5.99 to $19.98 per month and covers up to five kids on a single plan, with higher tiers adding features beyond basic banking and investing.
Key Features
- Debit and checking account for kids and teens.
- Parent-directed investing feature within the same app.
- Plans covering up to five kids.
- 70,000+ fee-free ATMs nationwide.
Pricing
$5.99 to $19.98 per month, covering up to five kids, per Greenlight’s plans page.
7. Acorns Early
Acorns Early is a UTMA/UGMA custodial account product managed by an adult custodian, per Acorns’ own site. The service was formerly known as GoHenry in the United States before GoHenry’s US service was renamed Acorns Early in November 2024. NerdWallet identifies Acorns Early as a custodial option that automatically invests additions into a diversified portfolio rather than requiring the custodian to pick individual holdings.
Pricing runs $8 per month for up to four kids on the Acorns Early Lite plan, or it is included with an Acorns Gold subscription at $12 per month or $144 per year. Acorns also matches 1% of contributions over $7,000, up to $70. Acorns Early account access is limited to ages 18 to 25, and it varies by state.
Key Features
- UTMA/UGMA custodial account structure.
- Automatic investing into a diversified portfolio.
- Account access age of 18 to 25, varying by state.
8. Alpaca
Alpaca is a brokerage infrastructure provider that delivers custodial account capability to its own business partners through a Broker API rather than directly to individual consumers. Per Alpaca’s own announcement, the company launched custodial accounts for its Broker API partners on May 11, 2026, including UGMA and UTMA account types.
Coverage includes UGMA accounts recognized in all 50 states, while UTMA accounts are available in every state except South Carolina and Vermont, per Alpaca’s announcement.
Key Features
- Custodial account infrastructure delivered through a Broker API.
- UGMA account support in all 50 states.
- UTMA account support in 48 states, excluding South Carolina and Vermont.
- Built for Broker API business partners rather than direct consumer sign-up.
Pricing
Not publicly available; Alpaca’s custodial accounts are distributed through its Broker API partners rather than sold directly to consumers.
9. Vanguard
The Vanguard Cash Plus Account functions as a savings account alternative, letting customers keep short-term cash and long-term investments at the same firm. Per Vanguard’s own site, a bank sweep program moves eligible balances to program banks for FDIC eligibility, and customers can also diversify into five Vanguard money market funds, each requiring a $3,000 minimum investment.
Business Insider reports that Vanguard custodial accounts carry no opening-deposit requirement and do not charge maintenance or account-transfer fees. Forbes Advisor notes that Vanguard’s investment lineup includes Vanguard mutual funds, stocks, bonds, non-Vanguard mutual funds, and ETFs.
Key Features
- Cash Plus Account functioning as a savings alternative.
- Bank sweep to program banks for FDIC eligibility.
- Five Vanguard money market funds available.
- Broad investment menu including stocks, bonds, and ETFs.
- No opening-deposit requirement for custodial accounts.
Pricing
$0 to open a custodial account; $3,000 minimum per money market fund in the Cash Plus Account, per Vanguard’s site and Business Insider’s review.
UTMA vs UGMA: Key Differences and Which One to Choose
UTMA and UGMA accounts differ mainly in which assets they can legally hold. FINRA notes that UGMA accounts are limited to certain asset types, while UTMA accounts permit virtually any type of asset, and availability of each varies by state.
Investopedia explains that a UTMA account can hold virtually any kind of asset, including real estate, intellectual property, and works of art, while a UGMA account is limited to financial assets such as cash, securities, mutual funds, annuities, and insurance policies. FINRA adds that both account types carry no withdrawal penalties or limits beyond the requirement that funds benefit the minor, and that custodial assets transfer to the child at the age of majority, which differs by state. Because that age and the specific rules both vary from state to state, the choice between UGMA and UTMA often comes down to which structure is available where the account is opened and whether the family wants the flexibility to hold non-financial assets.
Tax Implications of Custodial Accounts (Kiddie Tax, Gift Tax Exclusion, Filing)
Contributions to a custodial account count as gifts to the child. Thrivent’s 2026 guidance reports that the annual gift-tax exclusion is $19,000 in 2025 and 2026, which generally lets any individual contribute up to that amount without triggering gift-tax filing requirements.
Earnings inside the account face the so-called kiddie tax. A child’s unearned income may be subject to the kiddie tax and taxed at the parent’s rate when the statutory conditions apply. Unlike retirement accounts, custodial accounts carry no contribution limits, though gifts above the annual exclusion amount may need to be reported to the IRS. Because the account is taxable each year rather than tax-deferred, families should factor the kiddie-tax brackets into how aggressively they contribute.
Alternatives to Custodial Accounts: 529 Plans, Coverdell ESAs, and Custodial Roth IRAs
Families saving specifically for education costs often compare custodial accounts against 529 plans. Section 529 plans held $525.1 billion at the end of December 2024 across 17.0 million accounts, reflecting their popularity as an education-specific savings vehicle. The IRS defines a Coverdell education savings account as a trust or custodial account set up in the United States solely to pay qualified education expenses for a designated beneficiary, making it a narrower alternative than a general-purpose UGMA or UTMA account.
For teens with earned income, a custodial Roth IRA is another option. Eligibility depends on income thresholds: for a given tax year, for the 2024 tax year the cited source puts the single-filer limits at a full Roth IRA contribution when modified adjusted gross income is below $146,000, a partial contribution from $146,000 up to $161,000, and none at $161,000 or more. Unlike a standard custodial brokerage account, a custodial Roth IRA requires the minor to have earned income and is intended for retirement savings rather than general-purpose investing.
How Do Custodial Accounts Affect Financial Aid Eligibility?
Custodial accounts are counted as the student’s own asset on financial aid applications, which can reduce aid eligibility more than an equivalent amount held in a parent’s name. Because the assets legally belong to the child once contributed, they typically show up differently on aid forms than parent-owned savings or retirement accounts. Families planning for both college costs and broader investing goals weigh this tradeoff directly against vehicles like 529 plans, which can receive more favorable treatment on aid applications. Anyone relying heavily on need-based aid should factor this into the decision between a custodial brokerage account, a 529 plan, or a mix of both before funding a large balance in a child’s name.
How to Open a Custodial Account Step by Step
Opening a custodial account follows a similar process across most brokerages. FINRA notes that custodial accounts can generally be established at brokerage firms, mutual-fund companies, or other financial institutions, so the first step is choosing where the account will live.
From there, the SEC’s investor guidance offers a useful checklist, even though it was written with investment advisers in mind. Ask who will act as the custodian and get contact information for that custodian, and check whether the account is titled correctly in the child’s name with the adult listed as custodian. Confirm the account will generate statements at least quarterly, and compare fee schedules carefully, since the SEC warns that fees can materially affect long-term investment returns. Finally, fund the account, select investments appropriate for the time horizon until the child reaches the state’s age of majority, and keep records of contributions for gift-tax purposes.
Frequently Asked Questions
What happens to a custodial account when the child turns 18?
Ownership transfers once the beneficiary reaches the state’s age of majority, which varies by state. FINRA explains that the custodian must then transfer control of the account to the beneficiary, who can use the funds for any purpose from that point forward.
Can a parent withdraw money from a custodial account?
No. Contributions to a custodial account are irrevocable gifts to the child, and FINRA states that funds can only be used for the minor’s benefit while the custodian manages the account. A parent acting as custodian cannot withdraw the money for their own use.
Can you lose money in a custodial account?
Yes. Most custodial accounts hold market-based investments such as stocks, ETFs, or mutual funds, and their value rises and falls with the market. There is no guarantee against loss, which is why fee comparisons and investment choices matter over a multi-year holding period.
Can a custodial account be transferred to another child?
Generally, no. Contributions to a UGMA or UTMA account are irrevocable, and the named beneficiary typically cannot be changed once the gift is made. Anyone wanting flexibility to redirect funds between children may want to consider a different account structure before funding a custodial account heavily.
What is the age of majority for a custodial account?
The age at which a custodial account transfers to the beneficiary varies by state and account type. FINRA notes that the custodian must transfer control once the beneficiary reaches the state’s age of majority, and Acorns Early’s documentation reflects this variation, listing account access as available between ages 18 and 25 depending on the state.
What is the cheapest custodial brokerage account?
Cost depends on account type and usage; some brokerages charge no account fees, while banking-style apps charge monthly subscriptions. The fee table above lists each platform’s published figures for direct comparison.
What is a good investment app for kids?
The right app depends on whether the goal is teaching money basics, building a long-term portfolio, or both. For households looking to add income-producing real assets alongside a child’s custodial account, Ark7 offers fractional rental property shares starting at $20, with monthly distributions paid directly to the investor’s account.
Choosing the right platform ultimately comes down to matching fees, minimums, and investment menus to what the family actually wants to accomplish, whether that is a dedicated custodial brokerage account for a child, a 529 plan for education costs, or a broader household portfolio that includes real assets alongside stocks and ETFs. Browsing Ark7’s available rental property shares shows how fractional real estate ownership can fit alongside a family’s existing investment accounts.
Are custodial accounts FDIC insured?
Most custodial accounts hold market-based investments such as stocks, ETFs, or mutual funds, which are not FDIC insured and can lose value. Cash balances swept to program banks (as with Vanguard’s Cash Plus Account) may qualify for FDIC coverage, but the investment portion of a custodial brokerage account carries no such protection.
Real estate investing involves risk, including potential loss of principal. Past performance does not guarantee future results. This article is for informational and educational purposes only and does not constitute investment, legal, or financial advice.
