9 Best Custodial Accounts of December 2023
The best custodial accounts offer features that matter most to kid and adult account owners: low fees, investment education and strong customer support.
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Looking for a way to set your kid up with an investment account, but aren't sure where to start? Custodial accounts are a common way for adults to start an investment account for a child or grandchild, then hand the account off to them when they're legally an adult themselves. (Learn more about custodial accounts.) You may also see custodial accounts described as UGMA/UTMA accounts. This is based on the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act — the legislature that allowed for the formation of these accounts.
To arrive at our list of the best custodial accounts, we looked at factors that matter most to both the adult who started the account, as well as the child who will eventually take control of it. These factors include how robust a broker's educational materials are, how strong its customer support is, and how low its fees are, among other criteria.
Looking for a way to set your kid up with an investment account, but aren't sure where to start? Custodial accounts are a common way for adults to start an investment account for a child or grandchild, then hand the account off to them when they're legally an adult themselves. (Learn more about custodial accounts.) You may also see custodial accounts described as UGMA/UTMA accounts. This is based on the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act — the legislature that allowed for the formation of these accounts.
To arrive at our list of the best custodial accounts, we looked at factors that matter most to both the adult who started the account, as well as the child who will eventually take control of it. These factors include how robust a broker's educational materials are, how strong its customer support is, and how low its fees are, among other criteria.
Best Custodial Accounts
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Charles Schwab Learn more on Charles Schwab's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Charles Schwab's website | |
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website | |
 Vanguard Learn more on Vanguard's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Vanguard's website | |
 E*TRADE Learn more on E*TRADE's website | $0 per trade. Other fees apply. | $0 | Get up to $600 or more when you open and fund an E*TRADE account | Learn more on E*TRADE's website | |
 Firstrade | $0 per trade | $0 | Up to $200 in Transfer Fee Rebates | Read review |
$0
per trade
$0
None
no promotion available at this time
Pros
Four trading platforms with no minimum or fees.
Above-average mobile app.
Extensive research.
Large fund selection.
Commission-free stock, options and ETF trades.
Cons
Low interest rate on uninvested cash.
Why We Like It
Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, four free trading platforms, a wide selection of no-transaction-fee mutual funds and $0 commissions for stocks, ETFs and options.
$0
per trade
$0
None
no promotion available at this time
Pros
Large investment selection.
Strong research and tools.
Over 19,000 no-transaction-fee mutual funds.
High order execution quality.
Cons
High minimum to earn interest on uninvested cash.
Why We Like It
Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.
$0
per trade
$0
None
no promotion available at this time
Pros
Large mutual fund selection.
Commission-free stock, options and ETF trades.
Leader in low-cost funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short despite its $0 trade commission, due to the lack of a strong trading platform.
$0
per trade. Other fees apply.
$0
Get up to $600 or more
when you open and fund an E*TRADE account
Pros
Easy-to-use tools.
Excellent customer support.
Advanced mobile app.
Commission-free stock, options, mutual fund and ETF trades.
Cons
Website can be difficult to navigate.
Low interest rate on uninvested cash.
Why We Like It
E*TRADE has long been one of the most popular online brokers. The company's $0 commissions and strong trading platforms appeal to active traders, while beginner investors benefit from a large library of educational resources.
$0
$100
Get up to $500
in your new Brokerage Account when you sign up and make a deposit within 14 days. Plus, earn up to $10,000 to invest when you transfer your brokerage account to M1 within 30 days of opening an M1 account.
Pros
Commission-free trades for stocks and ETFs
Highly rated mobile app
Dynamic Rebalancing feature ensures cash moving in and out of the portfolio helps maintain target percentages of each investment “Slice”
High interest rate on uninvested cash.
Cons
Extra benefits are for premium subscribers only
Limited educational sources
Want to compare more options? Here are our other top picks:
Last updated on December 1, 2023
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
To recap our selections...
