Etrade Custodial Account for Minors and Young Investors

If you're a parent or guardian looking to help a minor or young investor get started with investing, Etrade's custodial account is a great option. Etrade custodial accounts allow minors to open and manage their own investment accounts with adult supervision.

Etrade offers two types of custodial accounts: Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA). Both types of accounts allow minors to earn interest and dividends on their investments.

To open a custodial account with Etrade, you'll need to provide identification for both yourself and the minor. This can be done online or by visiting a local Etrade branch.

The minimum deposit to open a custodial account with Etrade is $100, and there are no maintenance fees for accounts with a balance of at least $1,000.

Intriguing read: Can I Open a Custodial Account for My Niece

A custodial account is an investment account for children and teens offered by brokers, where adults, usually parents, make contributions on behalf of the child until the child reaches the age of maturity as set by state law.

The custodian, typically a parent, has broad discretion over how the account is invested and managed, including buying and selling securities, reinvesting dividends, and making withdrawals for the minor's benefit.

The two main types of custodial accounts are Uniform Transfer to Minors Accounts (UTMA) and Uniform Gift to Minors Accounts (UGMA), each managed by the state in which the account is established.

A custodial account is much simpler and less expensive to establish than a trust fund, making it a popular choice for parents looking to invest in their child's future.

A custodial account is a type of investment account that allows minors to invest in stocks and other financial assets under the supervision of an adult.

To be eligible to open a custodial account, you must be under 18, as minors cannot own stocks and other financial assets outright.

There are two types of custodial accounts: UGMA and UTMA.

These accounts allow your parents to give you money to buy stocks or other assets, but they will control the investments until you are no longer a minor.

A custodial account is designed to help children and teens grow their savings and investments over time.

The purpose of a custodial account is to provide a way for adults, usually parents, to make contributions on behalf of the child until they reach the age of maturity as set by state law.

Custodial accounts allow adults to have broad discretion over how the account is invested and managed, giving them the flexibility to make decisions that benefit the child.

Once the child reaches the age of maturity, they gain control of the account and its assets, taking ownership of their investments and savings.

Intriguing read: Florida Custodial Account Age

Choosing a custodial account provider can be a daunting task, especially with so many options available. E*TRADE is a well-established online broker that offers a custodial account with commission-free trading for stocks and ETFs.

E*TRADE's custodial account offers a wide range of investment options, including individual stocks and bonds, as well as Vanguard's entire fund lineup with no commissions. You can also invest in a Coverdell education savings account and an IRA for minors.

One of the key features of E*TRADE's custodial account is the ability to withdraw funds without penalties, as long as it benefits the minor beneficiary. This makes it a great option for parents who want to save for their child's future.

E*TRADE's custodial account also comes with a free debit card, checking, and bill pay, making it a convenient option for managing your child's finances. Additionally, you can open an account using the E*TRADE Core Portfolios robo-advisor service, which creates and manages the portfolio for you for a low annual fee of 0.30 percent of assets under management.

Here are some key features to consider when choosing a custodial account provider:

Ultimately, the best custodial account provider for you will depend on your individual needs and preferences. Be sure to research and compare the features and fees of each provider before making a decision.

Custodial accounts offer a lot of flexibility, with no limits on the custodian's income eligibility to contribute, no contribution limits, and no requirements to make regular distributions at any point.

The simplicity of setting up a custodial account is a major advantage, making it much easier and less expensive than establishing a trust fund.

You can use the funds in a custodial account for anything that benefits the minor, not just educational costs like college savings plans.

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To open a custodial account, you'll need an adult to manage it for you until you reach the age of majority, which varies by state.

You can be as young as 18 or 21 to have an adult open a custodial account for you, depending on the state's laws.

The adult who opens the account will be in charge of managing it until you're old enough to take over.

This setup allows you to start saving and investing early, but with adult guidance until you're ready to manage your finances on your own.

Once you reach the designated age, the account will be transferred over to you, and you'll be responsible for its management.

For another approach, see: How to Set up a Custodial Account

E*TRADE offers a wide range of account types to fit all of your financial needs, from a simple brokerage account to several different types of IRA and retirement accounts.

You can also open savings and checking bank accounts, custodial accounts, 4 types of managed portfolio accounts and retirement accounts for small businesses.

Check this out: Non Retirement Brokerage Account

E*TRADE allows clients to trade Bitcoin, foreign exchange (forex) and commodities futures, although you can’t trade spot forex, metals and cryptocurrencies.

Robinhood offers just 3 different accounts: The basic Robinhood Cash account, The Robinhood Instant account, and The Robinhood Gold account.

The Robinhood Instant account is the default account type when you open an account, and it gives you access to instant deposits and extended-hours trading.

The Robinhood Gold account can be opened with a $2,000 initial deposit and costs $5 per month.

Here are the account types offered by E*TRADE and Robinhood:

E*TRADE takes security seriously, offering a comprehensive security guarantee that covers any unauthorized transactions. This guarantee gives users peace of mind.

Their platform includes advanced login security mechanisms, such as 2FA, to protect accounts. E*TRADE also provides security monitoring and identity theft protection services.

E*TRADE goes the extra mile by offering extensive educational resources on how to protect accounts and recognize potential scams. This proactive approach demonstrates their commitment to security.

Customer support is a crucial aspect of any brokerage platform, and E*TRADE stands out from the crowd with its comprehensive support options.

E*TRADE offers 24/7 phone support, live chat, and email assistance, making it easy to get help whenever you need it. You can reach E*TRADE's customer service team at 1-800-387-2331 or [email protected].

Robinhood, on the other hand, has faced criticism for its limited customer support options, relying primarily on in-app messaging and email support. You can reach Robinhood's support team at [email protected].

E*TRADE's customer service is generally regarded as responsive and knowledgeable, catering to both novice and experienced investors. Response times may vary for email support, but you can expect to get help quickly if you need it.

Robinhood has been working to improve its support infrastructure, introducing 24/7 live chat for some issues and promising faster response times. However, phone support is still plagued by lengthy wait times, which can be frustrating if you're seeking immediate assistance.

E*TRADE wins in this category, hands down, with a much better customer service department than Robinhood.

E*TRADE has a long-standing reputation in the financial services industry and offers robust security features. Their comprehensive security guarantee covers any unauthorized transactions.

E*TRADE's platform includes advanced login security mechanisms, such as 2FA and security monitoring. This ensures that users' accounts are protected from unauthorized access.

E*TRADE provides its customers with identity theft protection services. This adds an extra layer of protection to their accounts.

E*TRADE also offers additional educational resources on how to protect their accounts and recognize potential scams. This demonstrates a proactive approach to security.

Robinhood has implemented strong security measures, but E*TRADE's comprehensive security guarantees give them an edge.