5 Best Investment Accounts For Kids in December 2025
Investing can help children learn about growing wealth and setting aside money for short- and long-term goals.
Deciding with them what their goal is — investing for a college education, retirement or something else — can steer them in the right direction.
CNBC Select has chosen the best type of investment accounts for kids, with recommended products in each category.
See our methodology for more information on how we made this list.
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1. Teen-owned brokerage account
Who’s this for? Brokerages have investment accounts exclusively for minors, which are ideal for parents who want their older kids to learn more actively about investing. A brokerage account in a minor’s name is considered a student asset when it comes to federal financial aid for college, however, and it carries more weight than parental assets.
Standout benefits: With the Fidelity Youth® Account for teens 13 to 17, parents open the account and can monitor activity, transactions and trades. There are no minimums or account fees, and teens can invest in U.S. stocks, ETFs and mutual funds.
Fidelity® Youth Account
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Minimum deposit and balance
Teens aren’t tied to any account minimums and there are no monthly fees
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Fees
$0 commissions for online U.S. stocks*
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Bonus
For a limited time: When you (parent or guardian) initiate the opening of a new Youth Account and your teen (aged 13 to 17) downloads the Fidelity Mobile® App and activates the new account, your teen will receive a $50 deposit as a reward1
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Investment vehicles
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Investment options
Stocks, ETFs and mutual funds
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Educational resources
Teens can access a financial curriculum made just for them to learn about saving, spending and investing
Pros
- No account minimums or monthly fees
- Educational investing resources customized for young teens
- Requires parental oversight: In order for a teenager to sign up, their parent or guardian must already have an existing Fidelity account. Parents can monitor their child’s account activity and set up notification alerts for trades, transactions and spending
- Teen users get access to a free debit card with no subscription fees, no account fees, and no minimum balances
Cons
- Only available to teens aged 13 to 17
- In order to sign up as a teen, parent or guardian must already have an existing Fidelity account
*$0.00 commission applies to online U.S. equity trades and Exchange-Traded Funds (ETFs) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other exclusions and conditions may apply. See Fidelity.com/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing & Custody Solutions® are subject to different commission schedules.
The Fidelity Youth Account can only be opened by a parent/guardian. Account eligibility limited to teens aged 13-17.
1Limited Time Offer. Terms Apply. Before opening a Fidelity Youth Account, you should carefully read the account agreement and ensure that you fully understand your responsibilities to monitor and supervise your teen’s activity in the account.
2. 529 college savings plan
Standout benefits: If your child doesn’t need the funds for college, you can transfer a 529 plan to another child, grandchild or parent. Depending on the state, you can also roll over unused funds to a Roth IRA, up to $35,000.
529 contributions are not federally tax-deductible, but you may get tax benefits if you choose the 529 plan your state offers. Here are some 529 plans that reward residents:
Michigan Education Savings Program (MESP)
Information about Michigan Education Savings Program (MESP) has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.
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Minimum opening balance
$25, or $15 per pay period via payroll deduction
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Maximum overall contribution
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Portfolio options
Investors can choose from enrollment year-based, multi-fund investments, single funds or the guaranteed fund option
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Underlying funds
A mix of funds from Schwab, TIAA-CREF and Vanguard
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Fees and expenses
Total asset-based expense ratio: 0.065% to 0.185%
Pros
- Available to residents of any state
- Offers low fees
- Diverse investment options
- Tax benefits for residents
- Offers gifting platform where givers can save their profile for future contributions
Cons
- Minimum opening balance, but it’s low
- Performance is lower than others on list
Invest529 (Virginia)
Information about Invest529 has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.
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Minimum opening balance
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Maximum overall contribution
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Portfolio options
Options include target enrollment portfolios (also known as age-based portfolios), index portfolios, target risk portfolios, principal protected portfolios and specialty portfolios
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Underlying funds
Investors can choose funds from Vanguard, Invesco, Blackstone, UBS and more
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Fees and expenses
Total asset-based expense ratio: 0.0% to 0.569%
Pros
- Available to residents of any state
- Offers low fees
- Diverse investment options
- Tax benefits for residents
Cons
- Minimum opening balance, but it’s low
- Expense ratios may be higher compared to other providers on our list
- Doesn’t offer online gifting portal for easy sharing
New York’s 529 College Savings Program
Information about New York’s 529 College Savings Program has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.
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Minimum opening balance
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Maximum overall contribution
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Portfolio options
Options include age-based options and individual options
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Underlying funds
Investors can choose funds from Vanguard mutual funds
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Fees and expenses
Total asset-based expense ratio: 0.12%
Pros
- Available to residents of any state
- Offers low fees
- Diverse investment options
- Tax benefits for residents
- No minimum contribution to start
- Offers gifting platform that allows gift-givers to save profile for recurring or future contributions
Cons
- Performance is lower than others on list
3. Coverdell ESA
Who’s this for? A Coverdell education savings account (ESA) is another tax-advantaged way to invest in your kid’s education, but, unlike a 529 plan, there are income limits. For single filers, the cap is a modified adjusted gross income (MAGI) of $110,000 and for married couples filing jointly, the limit is a MAGI of $220,000.
Contributions are not tax-deductible, but your money grows tax-free, as are withdrawals used for qualified education expenses.
Standout benefits: Coverdell ESAs can be used for all levels of education, from kindergarten through college. Parents can open an account at a bank, credit union or brokerage, and investment choices include including individual stocks, bonds, mutual funds, real estate investment trusts and ETFs.
4. Custodial Roth IRA
Who’s this for? A custodial Roth IRA is a tax-advantaged retirement account that an adult (often a parent) opens and manages for a child. The beneficiary must have earned income, so it’s best for older kids with a part-time job.
Standout benefits: As with a normal Roth IRA, contributions are already taxed and can be withdrawn at any time, penalty-free. Withdrawing investment gains usually comes with 10% penalty tax, but there are a number of qualifying exceptions, including educational expenses, the birth of a child and the purchase of a home. Once the child is of age (18 or 21, depending on the state), they’ll take over as custodian of the account.
5. UGMA or UTMA custodial accounts
Who’s this for? Adults can open a Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) custodial brokerage account for a child and manage it until they reach adulthood (18 to 25, depending on the state).
You’re not required to earmark the funds for any particular reason and anyone can contribute, although contributions are not tax-deductible. And because the funds are in the minor’s name, they are counted as student assets for federal financial aid eligibility.
Standout benefits: Money in UGMA or UTMA custodial accounts don’t have contribution or income limits. While both let you to invest in cash, stocks or bonds, only UTMA accounts include real estate assets.
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More on our top investment accounts for kids
| Account type | Contribution limit | Use | Investment options |
|---|---|---|---|
| Brokerage account | None | Funds can be used for anything | Mutual funds, stocks, ETFs |
| 529 college savings plan | Varies by state plan, but limits are typically high enough to cover the entire cost of college | Funds can be used for college; as well as for public, private or religious elementary through high school tuition (up to $10,000 per year per beneficiary), depending on the state’s plan | Typically more limited, mainly ETFs and mutual funds |
| Coverdell education savings account | Maximum is $2,000 per year per beneficiary, but that limit phases out for MAGI between $190,000 and $220,000 for joint filers, and for MAGI between $95,000 and $110,000 for single filers | Funds can be used for college; as well as for public, private or religious elementary through high school tuition (no limit) | More extensive, including individual stocks, bonds, mutual funds, REITs, ETFs |
| Custodial Roth IRA | In 2024, $7,000 or the child’s earned income amount, whichever is less | Funds are earmarked for retirement, but contributions can be withdrawn at any time, penalty- and tax-free; earnings can be withdrawn early penalty-free for qualifying exceptions | Broad range, including stocks, ETFs, mutual funds |
| UGMA/UTMA custodial accounts | None, but contributions are irreversible | Funds can be used for anything | Cash, stocks and bonds; for UTMA accounts only, real estate |
What kind of account should I open for my child?
The investment account you open for your child should reflect your family’s goals. If it’s to fund their education, a 529 plan or a Coverdell ESA is your best option. If it’s to grow a nest egg for your kid’s golden years (and they earn income), a custodial Roth IRA is the way to go.
Otherwise, a UGMA or UTMA custodial account doesn’t have restrictions on what the money can be used for. If you want something more hands-on that the kid can manage, consider a teen-owned brokerage account. This gives them direct access to buying and trading stocks, ETFs and mutual funds, which they can manage on their own.
FAQs
Can you set up an investment account for a child?
A parent or adult can set up an investment account for a child a few different ways, whether through a 529 plan, a Coverdell ESA, a custodial Roth IRA, a UGMA or UTMA custodial account or their own teen brokerage account.
Can you open a Roth IRA for a child?
Parents or adults can open a custodial Roth IRA for a child. Custodial Roth IRAs behave similarly to your traditional Roth IRA, as in contributions are made post-tax, there’s tax-free growth and contributions (not investment gains) can be withdrawn at any time, penalty- and tax-free. The child becomes the account holder when they turn 18 or 21, depending on the state.
How can my child invest with no income?
If your child has no income, they wouldn’t qualify for a custodial Roth IRA, but you could otherwise help them invest through other accounts where the adult makes contributions on the kid’s behalf but it goes toward the kid.
Is my child’s investment income taxed?
Whether your child’s investment income is taxed depends on the “Kiddie Tax” rule. For tax year 2025, if your child has no earned income and their investment income is less than $1,350, it’s not taxed. The next $1,350 of unearned income is taxed at the child’s rate and anything above $2,700 is taxed at the parent’s rate.
Parents may be able to include their child’s investment income on their own return, depending on how much they made.
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Our methodology
To determine the top investment accounts for kids, CNBC Select looked at what options parents have to begin investing with their kids. We took into account why you’d want to open an investment account for a child in the first place, such as saving for college or retirement, as well as the unique perks and different limitations that each account provides users. We also considered the educational tools that investment accounts provide for your family.
Contributions and earnings in an investment account are subject to fluctuations in the market and returns are not guaranteed. Earnings overall depend on any associated fees, your balance and the contributions you make to your investment account.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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