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November 5, 2019

Where Can I Open a Brokerage Account to Invest for my Kids?


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Our second question of the month comes in from Kevin from our Thriving Families Facebook Community … 

My kids are getting physical cash from grandparents for holidays. They are small denominations like $5 for Halloween, $1 for successful potty usage, etc.

What kind of vehicle does everyone have set up for this?

The easy solution is usually a savings account, but I'd love to get it in the market in some manner so the money can grow over their childhood.

Do brokerage houses such as fidelity even allow kids to open accounts with say $10?

Love to hear everyone's thoughts!

What a great question Kevin! I’m so glad you asked because it’s not something that I’ve covered very much on this show. 

To answer your second question right off the bat … Yes, Fidelity does have a Custodial Brokerage Account option (UTMA / UGMA) and with no minimum investment.

So that money your kids are getting from Grandparents, Holidays or potty time success can start to build up with compound interest in the stock market. The Fidelity representative that I spoke to on the phone told me you can start with even a penny.

What a great way to start conversations with your kids about investing and building wealth!

How We're Saving and Investing for Our Kid's Future

As for your first question, I’ll throw in my two cents on what I’m doing with my kids on saving and investing for the future. 

Each week, our kids do 3 chores and they earn a dollar equivalent to their age.

  • Zoey gets $7 because she’s 7
  • Calvin gets $5 because he’s 5

Outside of random birthday, holiday and monetary gifts from Grandparents, this is their only source of income currently (freeloaders!). 

With their money, our kids have been splitting it up between 3 jars.

  • Spend
  • Save
  • Give
Save Save and Give Jars

Recently, I’ve upped this to 5 jars by adding “College” and “Invest”. 

Our Kid's 5-Jar Chore & Reward System


Purpose: This money is meant for our kids to have fun with. We help guide them in making smart purchases and limit their bigger buys to once per month. 

As Zoey gets older, we’re going to consider a debit card-based system like FamZoo. This way she can make her own online purchases and not have to carry around the cash when she goes out with friends

Amount: 60% of their income.


Purpose: Our Save Jar allows our kids to save up for the more long term and bigger ticket items. For example, Zoey bought her latest bike with the money she saved up in her Save jar.

After some time, the Save Jar became too full so we opened an Ally Savings Account for her. Now at the end of each month, we empty her jar and deposit the money into her Ally account. 

Amount: 10% of their income.


Purpose: Being more generous is something I’m currently practicing with my children. Each quarter we get together for a tradition I’ve dubbed “The Big Give”. We empty their Give Jars, count up the money and review different charities they are interested in giving to.

Last month, Zoey wanted to give to the WWF to save Pandas and Calvin wanted to help kids who don’t have money for lunch. He gave his money to Feeding America

My wife and I match these donations dollar for dollar. 

Amount: 10% of their income.


Purpose: This one was a recent addition, but I thought it was important for a few reasons. 

  • I want my kids to understand that college is a serious investment and the whole family needs to save up for it (including them). 
  • It’ll give us a chance to discuss compound interest and investing.
  • Lastly, dialogue and conversation about college and their career-interests will happen more often. 

We want our kids to graduate college student debt-free. With the cost of college continuing to rise and rise, it’s going to take the whole family to get them through it. 

Amount: 10% of their income.


Purpose: My late mother-in-law started this tradition for our family. She gave $1,000 to each of our kids and wanted to invest for their future. Not for college or retirement, just for something special that they may want when they are adults. I loved that. 

To honor her memory and keep that tradition alive, our kids will contribute to their custodial (UTMA) brokerage account. Since we started young, this account will continue to grow and leave them with a nice 4 or 5-figure sum in their 20’s. 

Amount: 10% of their income.

Where Should I Get My Kid's Brokerage Account?

We’ve been using Vanguard for their UTMA account for the past year, but Kevin, now I’m considering Fidelity!

They have zero minimums and no account fees while Vanguard has a $1,000 minimum for Target Date Funds and a $3,000 minimum for mutual funds. Also, they charge a $20 annual fee if your balance is less than $10,000. Since that will pretty much be the entirety of my kid's childhood, I’m thinking a switch to Fidelity might make more sense.

(UPDATE: Just spoke to Vanguard on the phone about this. You can get the $20 fee waived if you sign up for e-statement delivery! Either way, they should update that on their website.)

Another player to consider that has low-cost index funds and a custodial program is Schwab. Like Fidelity, they have:

  • $0 account open or maintenance fees. 
  • Account minimum: $0
  • $0 online stock and ETF commissions

I love competition. That’s when the consumer wins! In this case, that’s when our kids win. 

Here’s to second-generation wealth-building, Kevin!

I hope my thoughts are helpful and best of luck saving and investing for your kid's future. 

Are you investing for your kids in a brokerage account? If so, where do you invest?

Please let us know in the comments below.

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.


  • Great article, Andy. I love this topic. We have custodial accounts for each of our 3 kids at Schwab. I chose Schwab because, as you note at the end of your article, they have no minimum account balances. And, the strategy I’ve encouraged them to invest with uses sector funds. At Fidelity, some of those funds require a minimum of $15,000 whereas the same funds can be purchased at Schwab for just $100.

    One other quick point. Regardless of which broker you use, it’s great to get kids started with investing sooner than later. I could talk to our kids about various investing topics and they’d probably half-listen. But now that they have some of their own money actually invested, they’re very interested. Just the other day, I was online with one of them and he saw a term he didn’t understand — cost basis. He was interested in learning, and that’s one of the main benefits of getting them in the game.

    • Great feedback Matt! Thank you.

      I love that your kids are asking those bigger questions — that’s the whole point of all of this, right?!


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