How do you open a Charles Schwab Custodial Account?
🙋♂️ This was a reader submitted question. If you have any questions that you would like James to answer, ask here.
In 2019, Charles Schwab is considered the best broker to open a custodial account with. Their custodial account comes with the same features as the normal accounts, namely:
- $0 Account Minimums
- No Annual Fees
- Options Trades for $4.95 + 65 cents per contract
- 500 commission-free ETFs and 4,000 no-transaction-fee mutual funds
For a custodial account, being fully featured (with access to research and other perks) paired with these benefits make it perfect for those on the path to Millionaire By 25.
Here’s how to open a custodial account with them (best for minors). You can do it multiple ways. Online tends to be the quickest and easiest, but you can also open it over the phone, or in person. Additionally, you can complete an application form, and mail it in. If you’d like to do it this way, here’s the link to the application. This is how to do it online:
Head over the the “Open An Account” page. Click on “More accounts”.
Click on “College Savings Accounts”, then on “Custodial Account”.
As with any custodial account, all assets are held within the minors name, and transfer over to them when they reach adulthood (18-21 depending on the state).
No gift tax can be incurred for contributions up to $15,000 ($30,000 per couple) for one minor in a single year, withdrawals can be made at any time and for any purpose, as long as it benefits the minor, and there’s tax-free earnings on the first $1,050.
You should now be on the landing page for the Custodial Account. Read about all of the features. When you’re ready to advance, click on the “Open A Custodial Account Button”.
Let’s review what you’ll need to open this account.
- Both people (to sign)
- Both SSN’s
- Your Address
- Both DOB’s
After clicking on the “Open a Custodial Account” button, you end up on a landing page, asking if you have an account. If you’re reading this article, you probably don’t (which is what the remainder of the article assumes).
First, provide both the custodian’s info, and the minor’s info. Then create the login ID.
Along the way, the custodian will have to enter employment information, and additional details (if they’re associated with publicly traded companies, etc…).
You’ll also find out when the account terminates, and assets fall completely under control of the minor.
Following that, you’ll enter additional account info.
The free checks and debit card is an amazing benefit of Schwab, and essentially makes it into a checking/investment account.
Finally, you’ll e-sign several documents. Afterwards, you’ll receive an email that the account has been opened, and from that point you’ll be able to fund it and trade.
We’ve published guides to opening custodial accounts with the following brokers. Each comes with it’s own perks, so take a look! 👇
|Schwab||Fidelity||Vanguard||TD Ameritrade||E-Trade||Ally Invest|