March 30, 2022

How to explain custodial account ownership to kids

Onu ABCs

Investing can feel intimidating, but we're here to simplify it a bit. Your investing journey starts today!

Even though an adult sets up custodial accounts, as soon as assets go into the account, it belongs to the child. Depending on which state the child lives in, they get access to the account at 18 or 21. The person who started the account controls the money during the waiting period but can only withdraw it under certain conditions.


Think back to our analogy for a custodial account being a truck bought for you. Even though the truck is in your name, you have to wait before being old enough to use it. In the meantime, the adult who bought it for you has control of it until you reach the age where you are handed the keys.

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This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals.