NOTE: EarlyBird has recently been acquired by Acorns. All customer accounts will officially close on June 23.

Baby Shower, birthday, even kindergarten graduation: every celebration in your child’s life includes gifts! While toys and clothes delight kids and parents, you and those close to you may also want to contribute to your kid’s future. In this EarlyBird App Review, you’ll learn how to easily set up and fund an investment account in your son’s or daughter’s name.

Who is EarlyBird?

“Last Christmas I spent $50 on a lego set for my godson that brought him approximately 13 seconds of happiness before being tossed into the mountain of gifts that already included two other lego sets. This year I spent $50 on his future and was also able to leave a video message!” 

– iPhone App Store EarlyBird Reviewer

CEO Jordan Wexler co-founded EarlyBird in 2000 with Caleb Frankel after experiencing much the same situation with his own nephew. By simplifying the set-up, funding and investing process for parents, EarlyBird helps them plan for their kids’ financial futures.

But the real focus shows in the simple gift-giving design that lets loved ones easily add cash into this same custodial account. EarlyBird estimates that its gift feature triples the total amount a child will have in their account by the time it becomes their own.

From the answers to three simple questions, a child’s EarlyBird investment portfolio reflects the risk profile and other preferences selected by their parents. Each of the five possible portfolios contains a mix of stocks, bonds, or both. 

Friends and family create Memories in the form of a short video to attach to their money gifts. 

As a new addition, the Nest feature lets parents invite close friends and extended family to join a small, closed community for their child. 

EarlyBird Review: Best Features 

Easy For Parents To Use

EarlyBird provides an incredibly easy way to set up an investment account for your child. Once you feel comfortable that you’re ready, start with your own information. Fill in your:

• Name
• Phone number
• Email address
• Birthdate
• Residential address
• Social security number

Next, connect to your bank account, and then you can create accounts for each of your children – even for one on the way! 

While these UGMA (Uniform Gifts to Minors Act) custodial accounts don’t have to be used for educational expenses like a 529 does, they do introduce a fiduciary duty for you as a parent. This means that funds in them cannot be used for a child’s day-to-day expenses or for child support. 

Easy For Friends and Family To Give

We all know the feeling of wanting to launch a young person into a successful future. EarlyBird’s gift-giving features make it simple for those who love your child to invest along with you. Even before they’re born!

Selecting the right account to give to only requires a phone number. Givers walk through a few simple steps to pay money directly to the child’s account from their own bank account.

Memories With Every Gift

Tying every present to a video greeting “Turns an impersonal cash gift into a lifelong memory!” in the words of a user review. The app becomes a repository of good wishes from throughout a young person’s life, not simply an investment account.

Widely Respected Investment Company 

EarlyBird selects its ETFs, or Exchange Traded Funds, from BlackRock, the world’s largest asset manager. ETFs trade like individual stocks or bonds but each contains a diversified mix of shares, charge lower fees than mutual funds, and offer lower risk than individual stocks or bonds.

EarlyBird Review: Areas for Improvement 

Monthly Fees

Fixed monthly fees currently sit at $5.99/month or $49.99/year. For a $10,000 account, this amounts to 0.72% or 0.5% annually.

Investment accounts often carry fees, but even small amounts add up and can affect returns. So compare them when choosing how best to invest for your child.

Flexibility of Use

UGMA accounts become the sole property of your child at an age your state decides, usually between 18-21. As the parent of a baby, or young child, you might assume that your child will be the model of responsibility when they grow up.

A 529 account is held in your name, with your child as beneficiary, and the funds earmarked for education. 

A young adult with a UGMA account, by contrast, might decide to spend their money in other ways. Not all kids go to college, so this might turn out for the best. But you won’t have any say over their spending choices.

Educating your child far in advance of this age sets the stage for making smart choices.

Also, keep in mind that assets owned by your child may reduce the amount of financial aid colleges offer by 20-25% of the asset value. Financial aid teams weight UGMA and custodial bank accounts more heavily than 529 plans. 

Projected Values Not Guaranteed

On average, over long periods of time, financial markets go up and so do your investments. However, deep dips in value sometimes occur as well. It can take years for investment portfolios to recover after one of these.

EarlyBird calculates projected values that use historical averages and compounding. Since these cannot be guaranteed, it’s important your child’s future assets include cash savings to cushion against the ups and downs of the stock and bond markets.

Nest Concerns

Most kids today grow up in some type of social media spotlight. Parents differ in opinions on how best to navigate this with their little ones.

The Nest feature in EarlyBird provides a smaller setting to post videos and photos, since only people you invite to be in it can see them. EarlyBird encourages each person to post videos and photos – called Moments – to share with the child. 

Parents add in Milestones – videos showing a first step, the first day of preschool, or a super cute baby-and-puppy nap day. The user interface then nudges each child’s EarlyBird Nest to respond to these parental videos. Instead of a like or emoji, they can select from one of three featured dollar amounts.

While this no doubt encourages more gifting, not all parents may feel comfortable having their child’s big accomplishments rated with a specific amount of cash. Their friends and family members may also prefer seeing cute videos that don’t come with a subtle ask for money.

Your family can choose to use, or not use, this feature in ways that fit with your own values.

EarlyBird Review: Competitors

Other companies allow you to set up custodial accounts for your child without the monthly fee. 

Vanguard

Vanguard pioneered index funds and offers youth accounts and custodial accounts as well. If you already work with them for your own retirement, you may feel comfortable using their tools to set up an account for your child. With low ETF management fees, your assets will grow more quickly.

Here's a detailed article on how to set up a custodial brokerage account with Vanguard.

Fidelity

Fidelity likewise prides itself on low management fees in its ETFs and allows you to create similar custodial accounts under the UGMA/UGTA or 529 umbrellas. 

Vanguard and Fidelity give you access to any asset for your child’s portfolio. If you’re new to investing, this might prove a bit daunting. But they both also offer suggested model investment mixes and educational materials and seminars.

EarlyBird Review: FAQ

Is EarlyBird App Legit?

EarlyBird started 5 years ago and has venture backing. It selects its ETFs from BlackRock, the world’s largest asset manager.

EarlyBird is a Registered Investment Advisor. As such, it holds a fiduciary responsibility to its clients and so must provide investment advice that is in its client’s best interest.

Apex Clearing Corporation acts as its brokerage partner, and its holdings are protected by the SIPC against fraud or brokerage failure up to $500,000. SIPC does not cover investments, however, against market losses.

How Much Does the EarlyBird App Cost?

Parents pay monthly fees to EarlyBird. $5.99/month or $49.99/year.

How Does EarlyBird Make Money?

EarlyBird earns fees every month from parents who hold custodial accounts for their kids.

Final Thoughts on Our EarlyBird Review

★★★

EarlyBird makes investing in your child’s future easy and memorable. They designed their sites specifically to enable contributions from your family and close friends.

That being said, more established companies like Vanguard and Fidelity have improved their processes over the years to make investing for kids easier. And they offer custodial brokerage account service with no monthly fees.

If you’re looking for a way to jumpstart your child’s financial future, we would recommend working with either of those firms before EarlyBird. If you prefer convenience and simplicity and don't mind the monthly fees, EarlyBird could be the right solution for your generational wealth investing needs.

---