Does Robinhood Offer Custodial Accounts for Minors
Robinhood does not offer custodial accounts
Robinhood does not provide custodial accounts for minors. The platform requires all account holders to be at least 18 years old and a U.S. citizen or resident alien with a valid Social Security number. If you want to invest money on behalf of a child, you will need to open an account at a different brokerage that specifically supports custodial accounts.
This restriction applies to all Robinhood account types — individual, joint, and retirement accounts. The company's age requirement is a firm policy, not a temporary limitation or something that changes based on account features.
Key Takeaways
- Robinhood requires account holders to be at least 18 years old, so you cannot open an account in a child's name there.
- A custodial account is a legal structure where an adult (the custodian) manages investments for a minor until they reach the age of majority.
- Brokerages that do offer custodial accounts include Fidelity, Charles Schwab, E-Trade, and Vanguard, among others.
- Custodial accounts come in two types — UGMA (Uniform Gifts to Minors Act) and UTMA (Uniform Transfers to Minors Act) — with different rules about what assets can be held.
What a custodial account actually does
A custodial account is a brokerage account opened in a child's name but controlled by an adult custodian — usually a parent or guardian. The custodian makes all investment decisions, buys and sells securities, and manages the account until the child reaches the age of majority (typically 18 or 21, depending on your state and the account type).
The account belongs to the child, not the custodian. This matters for taxes: investment income and gains are taxed in the child's name, which often means a lower tax rate than if the money were in the parent's account. When the child reaches the age of majority, they gain full control of the account and all its assets.
Custodial accounts are one of the simplest ways to start investing for a child without creating a trust or using other complex legal structures. They require no court involvement and minimal paperwork beyond what the brokerage asks for.
UGMA and UTMA accounts: the two types
Most custodial accounts fall into one of two categories, each governed by state law. UGMA accounts (Uniform Gifts to Minors Act) can hold cash, stocks, bonds, and mutual funds. UTMA accounts (Uniform Transfers to Minors Act) can hold those same assets plus real estate, intellectual property, and other types of property.
The practical difference for most families is small: UGMA is older and available in all 50 states, while UTMA is newer and available in most states but not all. UTMA accounts also allow the custodian to delay handing over assets until the child is older — up to age 25 in some states — rather than automatically transferring everything at age 18 or 21.
Your state law determines which type is available to you and what the age of majority is for that account. When you open a custodial account at a brokerage, the company will ask you which type you want and will handle the paperwork according to your state's rules.
Brokerages that offer custodial accounts
If you want to invest for a minor, these brokerages all offer custodial accounts: Fidelity, Charles Schwab, E-Trade, Vanguard, Merrill Edge, Ally Invest, and Webull. Each has its own fee structure, investment options, and minimum account balances — some have no minimum, while others require $500 or more to open.
Most of these platforms charge no annual custodial account fee, though some may charge trading commissions or other fees depending on the types of investments you choose. Before opening an account, check the brokerage's website for its current fee schedule and any restrictions on the types of investments available in custodial accounts.
Some brokerages limit custodial accounts to certain investment types. For example, one platform might allow stocks and mutual funds but not options trading, while another might have different rules. Read the account agreement carefully to understand what you can and cannot do in the account.
Tax treatment of custodial account earnings
Income and gains in a custodial account are taxed in the child's name, not the parent's. This can result in significant tax savings because children typically have lower tax rates than their parents. The first portion of investment income — currently around $1,300 per year — is tax-free for a dependent child, and the next portion is taxed at the child's rate rather than the parent's.
However, there is a limit to this benefit. If a child's unearned income (from investments) exceeds a certain threshold, the excess is taxed at the parent's rate under the "kiddie tax" rules. This prevents families from using custodial accounts to shift large amounts of income to children in lower tax brackets. The threshold changes each year and depends on the child's age.
When you file taxes, you will report the account's earnings on the child's tax return, not your own. If the child has no other income and the account earnings are below the tax-free threshold, no tax return may be required at all.
What happens when the child turns 18 or 21
When the child reaches the age of majority — 18 in most states, 21 in a few — the custodian's control ends and the account becomes the child's to manage. The custodian cannot prevent the child from withdrawing the money or making investment decisions, even if the custodian believes those decisions are unwise.
This is an important consideration when deciding how much to invest in a custodial account. Some parents prefer to use a trust instead, which allows them to set conditions on when and how the child can access the money — for example, requiring that funds be used for education or released in stages at ages 25, 30, and 35.
If you want more control over when your child can access the money, consult a lawyer about whether a trust makes sense for your situation. Trusts are more complex and expensive to set up than custodial accounts, but they offer more flexibility.
Alternatives if you want to invest for a child
If a custodial account does not fit your needs, you have other options. A 529 plan is a tax-advantaged savings account specifically for education expenses, and it offers more control over when money can be withdrawn — the account owner (usually the parent) retains control even after the child turns 18. A Coverdell Education Savings Account works similarly but has lower contribution limits.
You can also simply hold investments in your own name and gift them to your child later, though this loses the tax advantages of a custodial account and may trigger gift tax reporting requirements if the gifts are large. A trust is another option if you want maximum control and flexibility, but it requires legal setup and ongoing administration.
Each option has different tax treatment, contribution limits, and rules about what the money can be used for. Consider your goals — whether you want the money used for education, general investing, or something else — and how much control you want to retain before choosing.
Frequently Asked Questions
Can I open a custodial account at Robinhood for my child?
No. Robinhood does not offer custodial accounts and requires all account holders to be at least 18 years old. You will need to open an account at a different brokerage such as Fidelity, Charles Schwab, or Vanguard if you want to invest for a minor.
What is the difference between a custodial account and a trust?
A custodial account is simpler and cheaper to set up — you just fill out forms at a brokerage. A trust requires a lawyer and ongoing administration but gives you more control over when and how your child can access the money. Custodial accounts automatically transfer to the child at age 18 or 21; trusts can delay that transfer until the child is older.
Can I change my mind and close a custodial account?
You can close the account, but the money still belongs to the child. You cannot take the money back for yourself. Once you fund a custodial account, that money is legally the child's, even though you control it until they reach the age of majority.
Do custodial accounts affect financial aid for college?
Yes. Assets in a custodial account are counted as the student's assets when calculating financial aid may be able to access, which can reduce the amount of aid they receive. A 529 plan is often treated more favorably for financial aid purposes, though rules vary by school and aid program.
What happens if the custodian dies?
The account does not automatically close. Most brokerages allow a successor custodian to take over, or the account can be transferred to the child's legal guardian. Check your brokerage's rules about succession planning when you open the account.