Advice on an investment account

Custodial account could work depending on your state. Funds don’t have to be for education like they do in 529.

Also, see if her parents will be establishing a trump account. Could be another avenue

I am doing this for my grandkids. I set up a custodial account for each on Schwab. I split the deposits between s&p500 and nvda, with plans to always include the s&p with each deposit. This year's deposit will include something different than nvda. I occasionally review the account with the teenagers. Trying to teach them to keep most of their money in broad indexes. A couple of them added to their account with their own money; proud of that. Wish I had done this with my kids when they were young.

Why do you suggest this over custodial minor account?

Thanks for the comment on taxes. Haven't looked into it, but have 1 grandchild that meets the birthdate qualification. Are earnings taxed as short term gains?

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Custodial account could work

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I've been told to be cautious with this kind. Granted, this opinion is admittedly a little on the pessimistic side...the custodial account becomes theirs once they turn 18 is my understanding. You lose all control at that point. Pending how much money is in it, it puts a lot of responsibility on an 18 year old. Without looking at a crystal ball, you may not want them to have complete access to this money and use it irresponsibly. Again, I know that's a negative outlook, but I think most of us would admit at 18 years old we probably didn't make the BEST decisions. Especially financially

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Why do you suggest this over custodial minor account?


You retain control and beneficiary gets stepped up basis when you die.

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Valid answer. I went with custodial because I intend for them to take control of it. I am using it as a way to teach and encourage them to become investors.