Best custodial brokerage account: the fund moves $276, the fee costs $5,168

We went into this expecting the index fund to be the story. 0.00% versus 0.04% sounds like a real fight.

It's $276. Over 18 years. About $15 a year.

The money that moves is in the flat fees, billed in dollars instead of hundredths of a percent. Custodial accounts are 1 of the account types we run side by side in our guide to the best investment accounts for kids, and this page puts each broker's posted fees on the same $150-a-month kid we use across the site.

What is a custodial brokerage account?

A custodial brokerage account is a regular taxable brokerage account held under a state's UTMA or UGMA law, which makes the money the kid's, reported under the kid's Social Security number.

UTMA is the Uniform Transfers to Minors Act, UGMA the older Uniform Gifts to Minors Act. Inside either wrapper sit ordinary stocks, ETFs, mutual funds and cash.

An adult runs it as custodian until the age the state sets. Fidelity says "between 18 and 25, depending on the state." Schwab says "typically 18 or 21 (or up to 25)." E*TRADE says "18 or 21." Our UGMA vs UTMA breakdown reads 5 state statutes and prices what that age is worth.

1 thing it is not: the Fidelity Youth Account. Fidelity describes it as a brokerage account teens 13 to 17 own themselves, and says it "is not a joint account or a custodial account." The teen picks the investments, so it is not in our table.

Which custodial brokerage account is best for a child?

By 18-year cost, Fidelity, Schwab, Vanguard and E*TRADE finish within $276 of each other on fund costs, and the accounts that fall behind are the ones with a flat fee.

The setup: $150 a month from birth to 18, 216 end-of-month deposits, 7% a year compounded monthly. With no fees at all that lands at $64,608, the same number we use in UTMA vs 529. Each fund's expense ratio comes off the return, and each account fee comes off the balance when it is billed.

Read down the last column.

The first 6 rows are within $276 of each other. That is the entire difference the choice of index fund makes.

Then the table breaks in 2 places, and neither of them is an expense ratio.

The fund is a $276 decision. The flat fee is a $5,168 one.

How much are custodial account fees?

At Fidelity, Schwab and E*TRADE, custodial account fees are $0 to open, $0 a year and $0 for online stock and ETF trades. Vanguard matches on opening and trading, then charges a $25 yearly account service fee unless the account is on e-delivery.

We added Acorns Early Invest because it is the 1 kids' investing account here with a monthly subscription. The fund column lists the total-market U.S. stock index funds each broker runs itself. E*TRADE does not run 1, so its row carries a third-party total-market ETF at 0.03%, which trades there for $0.

Read across the first 3 columns and the 4 big brokers are the same account. Only 2 cells in that table cost real money: Vanguard's $25 a year and Acorns' $12 a month.

Vanguard's fee schedule, effective July 10, 2026, waives the $25 when the client "has elected e-delivery of statements" and the other account documents it lists. Leave paper statements on and it is $25 a year for 18 years.

That is $450 billed. Those $25 bills would also have grown by another $416. Together the fee adds $866, taking a VTSAX account's total drag from $276 to $1,142.

$866, for a checkbox.

How much does a $12-a-month kids' investing app cost over 18 years?

$5,168 on $150 a month at 7%, and that is before its own fund fees are counted. Acorns Early Invest, the custodial UGMA/UTMA, is a "Gold subscription exclusive," and Acorns Gold is $12 a month. (The $8 Acorns Early Lite is a money app and debit card with no investment account.)

$12 a month is $144 a year, 8% of the $1,800 going in. Over 18 years that is $2,592 of subscription. The balance ends $5,168 short because every $12 left early and missed the compounding.

Acorns also advertises "a 1% match on the first $7,000 you invest per year." On $1,800 a year that is $18 back. Net of the match the subscription still costs $126 a year, and the account ends at $60,065, which is $4,543 behind Fidelity's $64,608.

The villain here is the structure. A flat fee doesn't care how small the account is, and $12 a month is 8% of everything going in, every month, for 216 months.

2 caveats, pointing opposite ways. Acorns' pricing page does not post the expense ratios of the ETFs inside its portfolios, so we used 0.00% and the real drag is higher than shown. But Gold also bundles the parent's own investing account and tax filing, and covers Early Invest accounts for multiple kids "at no extra cost," so with 2 kids the $12 is split 2 ways.

Neither changes the shape of the result. A flat monthly fee on a small account is the most expensive structure in this table, by a factor of 4 to 4.5 over the next most expensive row.

Does the rate of return change the fee gap?

It changes the size, not the order. Of course 7% is an assumption and not a promise... blah blah, past performance. So we ran the same 216 deposits at 5% and 9% too.

At every rate the expense ratio costs a few hundred dollars, the same fund with the $25 fee costs about 4x that, and the $12 subscription costs about 4.5x that again. The ranking never moves.

The flat fees hurt more as returns rise, because every dollar pulled out early misses more growth. The $12 a month costs $4,190 at 5% and $6,436 at 9%.

How do you open a brokerage account for a child?

Opening a brokerage account for a child takes an adult to act as custodian, the child's Social Security number, and $0 at Fidelity, Schwab or E*TRADE. A baby qualifies the day the card arrives, because none of the 4 big brokers' custodial pages sets a minimum age.

Vanguard's page says "any adult resident of the U.S. can open or contribute to an UGMA or UTMA," and the custodian and the person giving the money "can be the same person, but don't have to be." At Vanguard the account is $0 to open, then $1 to buy VTI or $3,000 to buy VTSAX.

There is no contribution limit. Fidelity's page says so directly, and both Fidelity and Vanguard point to the gift tax line instead: $19,000 per person for 2026 (IRS Rev. Proc. 2025-32), which both pages put at $38,000 for a married couple.

$150 a month is $1,800 a year, 9.5% of the way to that line. The rest of the rule is in our annual gift tax exclusion for 2026 breakdown.

Who pays taxes on a custodial account?

The kid pays taxes on a custodial account, on paper: it sits under the kid's Social Security number, so the dividends and any gains are the kid's unearned income. The kiddie tax decides whose rate applies. For 2026 the line is $1,350 (IRS Rev. Proc. 2025-32).

• First $1,350 of unearned income: not taxed, covered by the dependent standard deduction.
• Next $1,350: the kid's own rate.
• Above $2,700: the parents' rate, if the kid is under 18 at year end, or is 18 or a full-time student 19 to 23 whose earned income was not more than half their own support (IRS Topic 553).

On our $150-a-month account the kiddie tax comes out at $0 for all 18 years. At the 1.06% dividend yield we used for a plain S&P 500 index fund in UTMA vs 529, the dividends never reach the $1,350 line. The bill shows up at the end: $3,741 of capital gains tax when the UTMA is sold at 18.

The taxes are $0 a year until the sale. The fees are not.

What are the downsides of a custodial account?

3, and none of them is the fee. They come from the UTMA statute and the federal aid formula, so they are the same at every broker on this page.

• It is irrevocable. Vanguard: once a gift goes in, "the gift or transfer cannot be revoked." Fidelity: custodian withdrawals "must be for the benefit of the child." The money is the kid's from day 1.
• The kid gets the keys at an age the state picks. Schwab puts it at typically 18 or 21, or up to 25, depending on the state. After that the custodian has no say in what happens to the $64,608.
• It counts against financial aid at the student rate. The FAFSA counts student assets at 20%, against at most 5.64% for a parent-owned asset like a 529. On the full $64,608 balance at 18, that is $12,922 added to the Student Aid Index (2027-28 SAI guide). Schwab's own custodial page says it plainly: "20% of the assets will be considered when applying for financial aid." We priced the 4 actual filing years in UTMA vs 529.

Picking a broker changes the fee column and nothing else on this list.

Frequently asked questions

What is the best custodial brokerage account?

By 18-year cost on $150 a month, Fidelity, Schwab, Vanguard and E*TRADE end within $276 of each other, because all 4 post $0 online commissions and index funds at 0.00% to 0.04%. The real gaps are flat fees: Vanguard's $25 a year without e-delivery adds $866, and a $12-a-month subscription costs $5,168.

Is a UTMA a brokerage account?

Yes. A UTMA or UGMA brokerage account is a regular taxable brokerage account opened under a state's custodial law, so the money belongs to the kid. The custodian manages it until the age the state sets, which runs from 18 to 25.

Do custodial accounts have fees?

At Fidelity, Schwab and E*TRADE the account itself is $0 to open and $0 to keep (checked Oct 16, 2026). Vanguard charges $25 a year without e-delivery, and Acorns Early Invest costs $12 a month through Acorns Gold. Every fund inside also has its own expense ratio, 0.00% to 0.04% for the total-market index funds we priced.

Can I open a brokerage account for a baby?

Yes, once the baby has a Social Security number, because the account is reported under it. None of the 4 big brokers' custodial pages sets a minimum age. The adult who opens it is the custodian and controls it until the state's handover age.

What happens to a custodial brokerage account when the child turns 18?

It depends on the state. The custodian hands the account to the kid at the age the state sets, typically 18 or 21, and up to 25 in some states. After that it is the kid's regular brokerage account, with no restrictions.

What is the difference between a Fidelity Youth Account and a custodial account?

Fidelity's page says the Youth Account "is not a joint account or a custodial account." It is a brokerage account a teen aged 13 to 17 owns and trades directly. A custodial UTMA is run by the adult, for a child of any age.

Does a custodial brokerage account affect financial aid?

Yes. It is the kid's asset, and the FAFSA counts student assets at 20%, against at most 5.64% for a parent-owned asset. On the full $64,608 balance at 18, that is $12,922 added to the Student Aid Index.

Is a UTMA cheaper to run than a 529?

On fees, a UTMA at a $0 broker can hold a 0.00% to 0.04% index fund with no plan fee on top. The 529 can win back more than that on taxes if the money is spent on school, which is the $3,741 of capital gains tax and the FAFSA gap we priced in UTMA vs 529.

Rules current as of Oct 2026: 2026 kiddie tax amount $1,350 (unearned income over $2,700 taxed at the parents' rate), 2026 gift tax annual exclusion $19,000, FZROX 0.00%, FSKAX 0.015%, SWTSX 0.030%, VTI 0.03%, VTSAX 0.04%, Vanguard account service fee $25 (waived with e-delivery), Acorns Gold $12 a month. Fees and limits move, so check the date on this line before you lean on it.

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