Best Investment Accounts For Minors
There’s no such thing as too early to start investing.
Remember, investing is not just for adults. As a parent, it is important to teach your kids the value of saving and the power of investment while they are still young. It can help them understand the importance of success in terms of their finances.
To start, here are some of the top picks for the best investment accounts for minors available today.
One of the best investment accounts out there is Charles Schwab. It has a wide range of investment options that you can explore. What’s good about their offering is that they do not require a minimum opening balance, which is ideal for smaller account dedicated to minors. They also do not have a monthly fee, and provide free trades of Schwab ETFs and accounts under the mutual funds’ list.
Another unique offering that this company has is that it gives you access to excellent investment advisors. They also have a deep well of research and learning tools that your child can leverage as he gets holder and more interested in closer managing his investment portfolio.
TD Ameritrade tailors its operations to young investors.
For one, there is no minimum investment amount required for a child to open an account. This is critical so kids can start quite early and see their accounts grow over time. Especially since it may be a while before they have a stable source of income, or side hustles.
Many parents that invest using TD Ameritrade will start with a small amount such as $50 for their child to get started. Then the child continues to put money earned through allowances, side gigs or even gifts from birthdays and other holidays. As the child sees his account balance grow, it motivates them to continue to save and work.
Aside from this standout feature, other characteristics make TD Ameritrade a first option. Here are some of them:
- Web Platform: Their web platform has various helpful tools that can assist you in decision making. Some of them include educational resources, third-party research, up-to-date news, planning tools, and trading insights from social media.
- Mobile Trading: TD Ameritrade has a device-optimized mobile app that can let you handle investments and opportunities even if you’re away.
- Integrated Watch List: You can track your investments and their performance using a customized and detailed watch list.
- Live-Stream Media: For your child to be able to feel like a professional trader, this platform also informs live-streaming media from places like CNBC. These streams tackle breaking news and investment-related topics.
Stockpile is a unique investment firm that allows individuals to buy fractional stock shares at a minimum of $5. Creating an account is free, but each trade charges a 99 cents fee for operational purposes. The interface of this investment account was well through out and made quick simple for young investors. It also has a mobile app that investors can download on their phones and tablets.
Once you open an account for your child, it also allows other family members to contribute to his or her investment. All you have to do is visit the Stockpile website and select one of the 1,000 ETFs and stocks out there. Once you have chosen where to invest, you can send this investment to your minor’s account through a print-at-home gift card or an e-gift card. It will feel as if you are helping your child grow his or her account.
Acorns is a mobile robo-advisor dedicated to managing a combination of a micro-investing app and a micro-savings app.
What’s good about Acorns is that it takes away all of the complications in investing. Just download the app on your mobile phone, link your preferred bank account, answer a few questions, and you’ll be an investor! You can connect it to any credit or debit cards, and the system will automatically “round up” your purchases and invest it on your behalf.
After creating an account and linking the cards, the website will ask you a few questions on the following:
- Details on your investment goals
- Your timeline and how long you want to attain these goals
- Your risk comfort level
Once you have answered this question, the system will crunch the numbers and analyze your answers. They will then recommend a list of five diversified portfolios that match you, your personality, and your goal. The only problem with this, however, is that you are only limited to investing in one of the five options recommended.
Take note that Acorns is also free for investors under the age of 24. You also don’t have to pay for anything if you have a valid .edu email address that you can use as your email link to your primary account.
If you’re not fond of investing your child’s cash in the erratic stock market, then Ally is perfect for you. It is leaning more on a more conservative option to save because of its high-interest rates.
Ally Bank is an online-only bank. This feature means that it does not allow any cash deposit. It does come with some helpful and valuable perks, however, such as ATM fee reimbursements for those who are more inclined to manage their banking online. It also has additional features such as electronic transfer methods, online transfers, and remote check deposits from phones – things that are tailored to digital-savvy millennials nowadays.
Fidelity Investments is not a full-service stockbroker; instead, it’s more dedicated to direct mutual funds services and commission-free exchange-traded funds. What’s good about this offering is you and your child won’t have to worry about studying the details of every stock you want to invest in. All you need to do is give your money, choose where to invest your money at a macro level, and let Fidelity Investments do the managing of it.
In the past, the company is known for its more expensive brokers. However, due to competition, they have recently dropped their fees and commissions. Now, their trade costs as little as $4.95. They also offer commission-free iShares ETFs that don’t require you to pay a trade commission.
Several parents are not that confident handling the investments of their children. Some feel that they do not have enough knowledge and expertise to mitigate risk and help grow their child’s money. If you’re this kind of parent, then the best thing to do is to let an expert manage your child’s portfolio . That is where FutureAdvisor can come in.
As a robo-adviser, its task is to manage your finances and investments for you. You fill out a survey that will give the system an idea of your goals and risk tolerance. From here, the robot will analyze your answers and match them with investments that are in line with where you want to be.
This may sound scary but now-a-days is a very common way to invest. The benefits is the small charges (only 0.5% annual management fee depending on the total value of your assets). This fee is automatically deducted from your account, so you won’t necessarily feel its loss.
You, as a parent, should guide your child into choosing the best investment account. Take note that it’s best if they fulfill the following criteria:
- Does not require a large opening balance
- The interface does not overwhelm first-time investors
- Does not penalize for small mishaps
- Sets up automatic investments
With all of these features in mind, the one investment account that covers all of this is the robo-advisor, FutureAdvisor. So, what are you waiting for? Engage your child now and grow your investment by rivers!
Teach your kids money management skills as early as now so that they can carry it into their adult lives. Finance 101 for Kids is a great read if you want your kids to know how to handle their money right. This entertaining and informative book written by Walter Andal will help get your kid on the right path towards making smart financial decisions.