Brokerage account and custodial fees (2023)

Ameriprise Financial clients can benefit from a full range of financial products and services designed to meet your needs. If you choose to implement your financial plan with Ameriprise Financial, any brokerage account and custodial fees are charged based on the products and services you purchase.

(Video) Custodial Accounts, Explained.

You may be eligible to be part of theAmeripriseAchiever Circleprogram offering exclusive benefits including reduced or waived fees noted below.

All fees are subject to change. Other fees and waivers may apply. Please see the Client Relationship Guide for additional information.

Account maintenance and custodial fees

Fee amount Fee may be waived or reduced if one or more of the following conditions are met
Ameriprise®Brokerage Account
$100 per year ($25 per quarter)1 An account holder is recognized as an AmeripriseAchiever Circle Elite2member
The account is open less than three months
The account holds only alternative investments and there is a managed account in the same ownership
The household group has paid $300 in brokerage account maintenance and/or custodial fees for the calendar year
The taxpayer on the account is an Ameriprise employee, advisor, franchisee or employee of a franchise advisor
Ameriprise®Brokerage 529 Plan Account
$25 per year An account holder is recognized as an AmeripriseAchiever Circle Elite2member
The household group has paid $300 in brokerage account maintenance and/or custodial fees for the calendar year
The taxpayer on the account is an Ameriprise employee, advisor, franchisee or employee of a franchise advisor
Ameriprise®Brokerage Investment Only Account
$100 per year ($25 per quarter) The account holds only alternative investments and there is a managed account in the same ownership
The account is open less than three months
The plan contains only a managed account, annuity or Ameriprise Certificate
Ameriprise ONE®Financial Account
$100 per year ($25 per quarter)1 An account holder is recognized as an AmeripriseAchiever Circle Elite2member
The account has a direct deposit of $9,000 within the preceding quarter
The account is open less than three months
The account holds only alternative investments and there is a managed account in the same ownership
The household group has paid $300 in brokerage account maintenance and/or custodial fees for the calendar year
The taxpayer on the account is an Ameriprise employee, advisor, franchisee or employee of a franchise advisor
Ameriprise®Coverdell Education Savings Account (CESA)
$10 per year An account holder is recognized as an AmeripriseAchiever Circle Elite2member

The account is recognized as a grandfathered lifetime custodial fee-waived plan

The household group has paid $300 in brokerage account maintenance and/or custodial fees for the calendar year (excludes fees charged to mutual fund accounts held outside of anAmeripriseBrokerage account orAmeriprise ONE®Financial Account)

Ameriprise®Tax-Sheltered Custodial Account (TSCA)
$50 per year An account holder is recognized as an AmeripriseAchiever Circle Elite2member
Ameriprise®Custodial 401(a) Plan Account
$75 per year Fee may be waived if only invested through a managed account, annuity or Ameriprise Certificate
Ameriprise®Individual Retirement Account (IRA)
$75 per year An account holder is recognized as an AmeripriseAchiever Circle Elite2member
The IRA is invested through only a managed account, annuity or Ameriprise certificate
The IRA plan is recognized as a grandfathered lifetime custodial fee-waived plan
The account holds only alternative investments and there is a managed account in the same ownership.
The household group has paid $300 in brokerage account maintenance and/or custodial fees for the calendar year

Account maintenance and custodial fees apply to the accounts listed above; they do not apply to managed accounts. For more information about fees assessed to managed accounts, contact anAmeriprise financial advisor.

1Maintenance fees for Ameriprise brokerage accounts andAmeriprise ONEFinancial Accounts with UGMA/UTMA ownerships are $15 per quarter ($60 per year).

2Eligibility for recognition in the AmeripriseAchiever Circle Eliteprogram is achieved through maintaining a household group valuewith Ameriprise Financial of $500,000 or more. A householdgroup consists of accounts owned by an individual, their spouse or domestic partner, andtheir unmarried children under the age of 21 who reside at the same address. Plans subject to ERISA will not be included in the total household group value when determining ACE eligibility.

Service fees

ADR3 Variable
ATM Surcharge Variable
Brokerage Retail Order Handling Fees $6 per trade
Cash Debit4 Variable
Certificate Delivery $80
Check Copy $3 per copy
Check Reorder Variable
Custody/Safekeeping — Worthless5 $25/per position
Debit Card Receipt Copy $10 per copy
Deposit/Withdrawal at Custodian (DWAC)6 Variable
Direct Registration System (DRS) Request Fee7 Variable
DRS Reject Fee3 Variable
Estate Settlement and Processing Fee8 $200
Express Mail — Domestic $25
Express Mail — International $35
Invalid Certificate9 $125
IRS Form 990-T UBTI Tax Filing Service Fee11 $200 per Form 990-T filed
Late Trade Settlement $15 per trade ($30 max charge per settlement date)
Legal Process $40 per order
Legal Transfers $30
No-load Mutual Funds $39.95 per fund
Non-Sufficient Funds $29
Physical Custody - Foreign Security $100 per position
Physical Reorg Deposit $70 per CUSIP
Pledge Account (paid at the time the account is pledged) $100
Registered Non-traded Security Custody (Annual fee) $150 per position
Registered Non-traded Security Custody (Initial) $150
No-load Mutual Funds $39.95 per fund
Non-Sufficient Funds $29
Pledge Account (paid at the time the account is pledged) $100
Physical Custody - Foreign Security $100 per position
Physical Reorg Deposit $70 per CUSIP
Quotes Variable
Research $25 per hour
Restricted Custody (Initial Fee) $100 per position
Restricted Custody (Annual Fee) $100 per position
Restricted Transaction $100 per transaction
Returned Check or ACH Deposit $25 per item
Stock Borrowing Variable
Stop Payment or Reissue10 $25 per item
Transaction Fee Variable
Transfer Out $125
Treasury Auctions $40
Unregistered Security Custody (Annual fee) $250 per position
Voluntary/Reorg Service Charge $30
Wire Transfer Out — Domestic $30
Wire Transfer Out — International $35

3Ameriprise reserves the right to assess on a pass-through basis any applicable Depository and Transfer Agent custodial fees against your account related to securities you may hold. Ameriprise and its clients are subject to policy and regulations set forth by various regulatory bodies and exchanges. At times, a nominal transaction fee to cover costs of self-regulation may be charged. These policies, regulations, and fees are subject to change.

4Ameriprise reserves the right to assess fees and/or interest on any funds advanced to you which result in an open debit in your account. Open Debit Fees are calculated as follows: Debit amount (x) base margin lending rate (x) number of days/360= Fee amount.

5To help defray the cost of holding and maintaining securities that may have been deemed worthless and/or without value

6DWAC fees are typically $50 to $250, but can vary by transfer agent. The actual cost will be determined by the transfer agent, and will be passed onto you. DWAC fees are assessed when exercising employee stock options within an Ameriprise Brokerage Account.

7DRS fees are generally $15, but can vary by transfer agent. The actual cost will be determined by the individual transfer agent and will be passed on to you. DRS fees are assessed when transferring shares to client brokerage accounts.

8Estate Processing fee is charged one time at the time of estate settlement. This fee will be waived under the following circumstances:

  • Estate contains no eligible Ameriprise brokerage or advisory accounts
  • Decedent’s spouse is the sole claimant
  • Decedent is under 21 years of age
  • Total claim value is less than $5,000
  • Total claim value is greater than $1,000,000

9For a certificate that is rejected by the assigned transfer agent because it was previously paid, replaced, reissued, exchanged, has a “Stop Transfer” applied to it or has otherwise been deemed invalid.

(Video) The Complete Guide To Custodial Accounts

10For disbursements issued by Ameriprise.

11Master limited partnerships held in an IRA can generate unintended business taxable income (UBTI) resulting in a current year federal income tax liability for qualified accounts. This service fee covers the tax return preparation and filing on these investments, when required.

(Video) How to Open a Kids' Investment Account (Fidelity Custodial Account Explained)

Brokerage trade related fees

Ameriprise Financial may assess multiple trade-related fees and/or commissions if a single order or transaction is executed on multiple days.

Fee type Additional details Fee amount
Retail Order Handling Fee Not assessed for orders placed in managed accounts, institutional accounts, annuities, insurance and certain alternative investments. $6
Late Trade Settlement Up to a maximum charge of $30 per settlement date for trades within an account where an extension has been filed (online Brokerage only). $15
Transaction Fee Ameriprise Financial and its clients are subject to policy and regulations set forth by various regulatory bodies and exchanges. At times, a nominal transaction fee to cover costs of self-regulation may be charged. This fee is only assessed on sells of certain securities; it is not assessed on mutual fund buys or sells. These policies, regulations and fees are subject to change. Variable

Mutual fund trade related fees

Fee type Additional details Fee amount
No-Load Mutual Funds without a transaction fee

Other fees and expenses may apply. Refer to the fund prospectus for details. A transaction fee may be assessed at the time of purchase or sale to cover the cost of offering the mutual fund to you. An early redemption fee may also be imposed by the fund company, generally if the position is held less than 180 days; refer to the fund prospectus for details.

Ameriprise Financial reserves the right to assess any applicable fees or associated costs on a pass-through basis.

No charge
No-Load Mutual Funds with a transaction fee

A transaction fee may be assessed at the time of purchase or sale to cover the cost of offering the mutual fund to you. An early redemption fee may also be imposed by the fund company, generally if the position is held less than 180 days; refer to the fund prospectus for details.

Ameriprise Financial reserves the right to assess any applicable fees or associated costs on a pass-through basis.

$39.95
Load Mutual Funds Refer to the fund prospectus Refer to the fund prospectus

Investment minimums for individual mutual funds are determined by the fund company. Refer to the fund prospectus for details.

Ameriprise Financial provides record keeping and shareholder services for, and receives remuneration from, unaffiliated funds. You can buy shares directly from the fund itself, or its principal underwriter or distributor, without paying brokerage transaction fees.

Margin lending

The following structure and rates apply:

(Video) Investing For Kids (HOW TO GIVE THEM A HEAD START)

Average daily debt balances Margin rate Effective rates
$500,000 – above Base − 1.00% 11.00%
$100,000 – $499,999 Base − 0.50% 11.50%
$50,000 – $99,99912 Base13 12.00%
$25,000 – $49,999 Base + 1.25% 13.25%
$0 – $24,999 Base + 2.00% 14.00%

12Margin interest charges will be calculated based on a sliding scale of percentages added to or subtracted from a base lending rate, set at the discretion of American Enterprise Investment Services, Inc., with reference to commercially recognized interest rates, industry conditions regarding the extension of margin credit and general credit conditions.

13Base lending rate: 11.75% as of May 5, 2023. This information is subject to change without notice.

ATM surcharge fees

ATM network/owner surcharges and the ATM fee rebate program
Ameriprise Financial does not assess ATM surcharge fees and is a member of a surcharge-free ATM network. ATM operators and/or networks who are not members of the surcharge-free network may assess an ATM surcharge fee. In those instances, we offer a rebate program if you are recognized as an AmeripriseAchiever Circleor AmeripriseAchiever Circle Elitemember. ATM surcharge fees are rebated monthly based on your AmeripriseAchiever Circlestatus at month end. The ATM fee rebate program may be modified or discontinued at any time. To find surcharge-free ATM locations near you visitameriprisebank.com/atm.
Achiever CircleMembers Receive up to five surcharge transaction fee rebates totaling up to $10 per month.
Achiever Circle EliteMembers Receive unlimited surcharge transaction fee rebates.

TheAmeriprise ONE®Financial Account is a brokerage account with cash management features.

Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Ameriprise Financial Services, LLC. Member FINRA and SIPC.

FAQs

Brokerage account and custodial fees? ›

Custodial fees are a type of fee paid to a brokerage firm for the services associated with taking care of your investments. Fees vary by firm and account type; they will usually be automatically deducted from your account on a regular basis.

Is a brokerage account a custodial account? ›

The term custodial account generally refers to a savings account at a financial institution, mutual fund company, or brokerage firm that an adult controls for a minor (a person under the age of 18 or 21 years, depending on the laws of the state of residence).

Are custodial brokerage accounts a good idea? ›

Is a Custodial Account a Good Idea? A custodial account can be a great way to save up money for your child's future. A custodial account provides a lot of flexibility for how you want to invest and use the funds as opposed to a 529 account which has specific rules around how you can spend the money.

What is a custodial brokerage? ›

What Is a Custodial Brokerage Account? A custodial brokerage account is an investment account that is managed by an adult on behalf of a child. When the child reaches the age of majority in her state, she gets full control of the account.

What are brokerage account fees? ›

Brokerage fees are any commissions or fees that your broker charges you. Also called broker fees, they are generally charged if you make buy or sell shares and other investments, or complete any negotiations or delivery orders. Some brokerages also charge fees for consultations.

What are the disadvantages of a custodial account? ›

The chief disadvantage is that custodians lose control of the money once the minor reaches the age of majority. Having custodial accounts can also negatively affect the financial aid prospects of a child.

What is the difference between brokerage and custodian? ›

A custodian is responsible for the safekeeping of your assets. This is in contrast to the broker who is primarily focused on accessing the financial markets on your behalf. This critical difference can be easily identified by the simple fact that custodians do not commingle client assets whereas brokers do.

What is the disadvantage of a brokerage account? ›

The major drawback of a brokerage account is that there is no tax advantage. Investors can only put after-tax funds in the accounts, and any returns on the accounts are also subject to taxes. Brokerage account investors can manage their taxes by using strategies to take advantage of lower long-term capital gains rates.

Who pays the taxes on a custodial brokerage account? ›

Custodial accounts can be a great means of investing for a child's future, but understanding the tax consequences is crucial. The child who technically owns the account is responsible for paying taxes, with an exemption of $1,100 for 2021.

Do parents pay taxes on custodial accounts? ›

What are the tax considerations for custodial accounts? Any investment income—such as dividends, interest, or earnings—generated by account assets is considered the child's income and taxed at the child's tax rate once the child reaches age 18.

Can you withdraw money from a custodial brokerage account? ›

As the custodian, you can withdraw money from a custodial account if you need to use it to pay for something that will benefit the minor. You can't take the money back yourself, or give it to someone else.

What are the tax benefits of a custodial account? ›

The main benefits of a custodial account are that you can take advantage of the gift tax exclusion while maintaining control over how the money is invested and spent while your child is a minor (as long as it is for their benefit).

Can you take money out of a custodial account? ›

While you can technically withdraw money from a custodial account before your child reaches the age of majority, you can only do so for the direct benefit of the child. That means any purchases must be to help your child, like buying new school clothes or braces.

Can you avoid brokerage fees? ›

Fortunately, transaction fees are easily avoided by selecting a broker that offers a list of no-transaction-fee mutual funds — most do. Many funds on this list will be from the broker itself, but other mutual fund companies often pay brokers to offer their funds to customers without a transaction cost.

Which brokerage has lowest fees? ›

Introduction
Stock Brokers In IndiaBrokerage charges for delivery trades.Maximum Brokerage charges for commodity (per trade)
ZerodhaZero20/-
UpstoxZero20/-
5paisa15/-15/-
Samco20/-20/-
Mar 15, 2023

Do brokerage accounts have monthly fees? ›

Brokerage fees: There are certain fees your brokerage can charge to hold your investment account. For example, you might annual fees, monthly account maintenance fees, inactivity fees, research fees, paper statement fees or transfer fees to move money between accounts or a fee to close your account.

What happens to money in a custodial account? ›

Money put into custodial accounts becomes the property of the child and can only be used for their benefit. The state legislation that allows for gifts to children is the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA).

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

At 18, however, any child custodial accounts held for their benefit become immediately payable, unless age 25 is specified. Such custodial funds must be released regardless of whether it is in the child's best interest. Only a conservatorship of the person's estate could intervene to control such custodial funds.

What is the purpose of custodial account? ›

What is a custodial account? A custodial account is generally created by a parent or grandparent for the benefit of a minor child or grandchild. When you put money into a custodial account, you make a gift to the minor beneficiary of the account, even though the minor does not control the account.

Is Schwab a broker or custodian? ›

Charles Schwab & Co., Inc. (Schwab) is a broker-dealer registered with the Securities and Exchange Commission (SEC). The summary below highlights the nature of the brokerage relationship with our clients. Schwab is also an investment adviser registered with the SEC.

Is Schwab considered a custodian? ›

We take our role as custodian seriously. When you work with Schwab you can be assured that we follow stringent internal practices and business standards designed to keep client assets safe.

Is TD Ameritrade a custodian account? ›

Account Protection

The custodian of your account, TD Ameritrade Clearing, Inc., is a member of the Securities Investor Protection Corporation (SIPC). Funds are available to meet customer claims up to a ceiling of USD$500,000, including a maximum of USD$250,000 for cash claims.

Is it safe to keep more than $500000 in a brokerage account? ›

Is it safe to keep more than $500,000 in a brokerage account? It is safe in the sense that there are measures in place to help investors recoup their investments before the SIPC steps in. And, indeed, the SIPC will not get involved until the liquidation process starts.

What are the 3 types of brokerage accounts? ›

The basic types of brokerage accounts
  • A standard brokerage account is the most common. ...
  • A margin account is a special subset of a standard account. ...
  • A retirement account is a brokerage account that has special tax status, with money growing in the account tax-free.
Aug 26, 2022

Do you pay taxes on a brokerage account? ›

Brokerage accounts (also called non-qualified accounts) are taxed differently than qualified retirement plans like a 401(k) or a 403(b). Even without taking money from the account, your brokerage account will be subject to tax each year.

Do you pay capital gains on a custodial account? ›

Contributions to UGMA accounts are not tax-deductible, and capital gains on these accounts are subject to taxation. Parents have the option to include the child's income on their own tax return or file a separate tax return for the child.

What is better 529 or custodial account? ›

In general, it's likely better to give money to people using custodial accounts because it's a gift that comes with no restrictions or strings attached. The heavy restrictions of a 529 are only worth dealing with if the tax benefits are very high and you're certain that the recipient will use the money for education.

Who does the IRS consider the custodial parent? ›

The custodial parent is the parent with whom the child lived for the longer period of time during the year. However, the child will be treated as the qualifying child of the noncustodial parent if the special rule for children of divorced or separated parents (or parents who live apart) applies.

How does the IRS know who the custodial parent is? ›

Determine Who the Custodial Parent Is

Before a parent can claim a child as a tax dependent, the IRS requires you to determine which parent is the custodial parent. According to the IRS, the custodial parent is the parent who the child lived with for a longer period of time during the tax year.

How does the IRS prove custodial parent? ›

Proof of Relationship

Birth certificates or other official documents that show you are related to the child you claim. You may have to send copies of more than one person's birth certificate.

What are the disadvantages of UTMA accounts? ›

Cons of an UGMA/UTMA Account

A big drawback is that all assets transferred into an UGMA account law are irrevocable transfers. This means that your child owns the assets, and the child has the authority (not the parent) on how to use the funds once the child reaches the age of majority.

Can a kid use a custodial account for stock trading? ›

A minor, commonly a person under age 18, may be named on a brokerage account if a parent or guardian opens a custodial account with the child. Under the Uniform Transfers to Minors Act, parents can only use the money in these accounts for the child.

What is the difference between custodial brokerage account and UTMA? ›

Types of custodial accounts

These are taxable brokerage accounts. UGMA accounts allow adults in all 50 states to give minors cash or securities. UTMA accounts are similar, but they also allow transfers of real estate, art and other assets not permitted in a UGMA account.

Does the parents or the child file taxes on a UTMA custodial account? ›

The minor does have to pay taxes, as they are the owner of the UTMA account. However, there are some benefits of the account belonging to the child and not the custodian. First, as of 2021, the IRS exempts $1,100 of the account's passive income or gains from taxes each year.

Who gets the interest earned from a custodial account? ›

Any income from a child's custodial account belongs to the child. If that income exceeds certain thresholds, you'll need to file a separate federal income tax return for the child using Form 1040, 1040A, or 1040EZ.

When should you close a custodial account? ›

Once the minor reaches the age of termination, usually the same age as entering adulthood, the custodian relinquishes control of the account. At this point, the assets transfer to the named beneficiary who can then claim full use of the funds held in the account.

Can you sell stocks on a custodial account? ›

Can a minor buy and sell stock? Yes. They just need to have an adult on the account with them, usually mom or dad, but it can be a grandparent, aunt, uncle, or other adult. This kind of account is called a custodial account.

Can you day trade with a custodial account? ›

The financial institution where the account is held will accept investing instructions from the custodian, and typically, you'll be able to execute trades or conduct other business in exactly the same way you'd do it with your own account.

Can I spend money from my brokerage account? ›

Spend It. Most brokerages will let you pay bills with your brokerage cash. Charles Schwab, TD Ameritrade, Interactive Brokers, and many others permit this, and you just need to set up a payment account. Or spend it on your vacation, or get some nice shoes.

Is a 1% management fee high? ›

Many financial advisers charge based on how much money they manage on your behalf, and 1% of your total assets under management is a pretty standard fee. But psst: If you have over $1 million, a flat fee might make a lot more financial sense for you, pros say.

What are the four types of fees that you might be charged by a broker? ›

The different types of brokerage fees you may encounter include:
  • Mutual fund fees, including sales loads and 12b-1 fees.
  • Trading spreads.
  • Trading commissions.
  • Assets under management (AUM) fees.
  • Account fees.

Which broker does not charge brokerage? ›

The most popular discount brokers include Zerodha, 5paisa and upstox. Most discount brokers including Zerodha and Upstox offer brokerage free equity delivery trading and direct mutual funds.

How do you solve brokerage fees? ›

Brokerage charge is 0.05% of the total turnover. Suppose the stock you buy costs Rs 100. Then the brokerage charge is 0.05% of Rs 100, which is Rs 0.05. Then, the total brokerage charge on the trading is Rs 0.05+ 0.05, which is Rs 0.10 (for buying and selling).

Is there any zero brokerage? ›

Zero brokerage is a part of the discount brokerage model of trading but under discount brokerage, a flat fee is charged (usually Rs. 20 per trade) whereas under zero brokerage, no brokerage is charged across products.

What is a good brokerage fee? ›

Realtors and real estate brokers typically charge around 5% to 6% of the selling price of a house. 2 This is often split between the seller's agent and the buyer's agent. Some discount real estate brokerages may charge a lower rate or instead offer a fixed-fee service.

How much money do you need in a brokerage account? ›

You generally do not need a lot of money to do so. In fact, many brokerage firms allow you to open an account with no up-front deposit. However, you will need to fund the account before you buy investments. You can do that by moving money from your checking or savings account, or from another brokerage account.

Is it better to invest with a bank or a broker? ›

It's generally agreed that independent brokers make superior investments because they're cheaper, more flexible, have fewer conflicts of interest, and are more dynamic in terms of the user and trading experience. Banks certainly have a place in your financial plan.

What is a brokerage account classified as? ›

A brokerage account is an investment account that allows you to buy and sell a variety of investments, such as stocks, bonds, mutual funds, and ETFs.

Can a child have a brokerage account? ›

A minor, commonly a person under age 18, may be named on a brokerage account if a parent or guardian opens a custodial account with the child. Under the Uniform Transfers to Minors Act, parents can only use the money in these accounts for the child.

Will custodial have to pay taxes on their child's brokerage account? ›

Custodial brokerage accounts come with no contribution limits, meaning you can invest as much money as you'd like for your child's future. The custodian will be responsible for filing tax forms on their child's behalf for any gains and ensuring taxes are paid.

What are the three types of brokerage? ›

A stock investor or trader can look into three main types of brokers: full-service brokers, discount brokers, and robo-advisers.
  • Full-service Broker. A full-service broker provides a large variety of services to its clients. ...
  • Discount Brokers. ...
  • Robo-advisers.

Which type of expenses are brokerage? ›

A brokerage fee is a fee or commission a broker charges to execute transactions or provide specialized services on behalf of clients. Brokers charge brokerage fees for services such as purchases, sales, consultations, negotiations, and delivery.

What type of brokerage account should I open for my child? ›

A great way to get kids interested and involved in investing is to open an investment account. Here are a couple of appropriate account types: A custodial account—If you want to give a gift of money to a minor—and at the same time introduce the world of investing—a custodial account can be a good choice.

What happens to custodial brokerage account when child turns 18? ›

When children reach the age of majority, the account can be transferred into their name only with custodian consent. Otherwise, they can remove the custodian from the account at the age of termination. Ask your brokerage firm what ages apply to your son's accounts and the steps you need to take at each point.

What is the best custodial account for minors? ›

NerdWallet's Best Custodial Accounts of June 2023
  • Merrill Edge® Self-Directed.
  • Interactive Brokers IBKR Lite.
  • Vanguard.
  • Ally Invest.
  • Charles Schwab.
  • Fidelity® Youth Account.
  • Firstrade.
5 days ago

How are custodial brokerage accounts taxed? ›

What are the tax considerations for custodial accounts? Any investment income—such as dividends, interest, or earnings—generated by account assets is considered the child's income and taxed at the child's tax rate once the child reaches age 18.

Who owns the money in a custodial account? ›

Assets and income in a custodial account belong to the minor beneficiary (the child). Minors with unearned income such as interest, dividends, and capital gains, generally have to file an income tax return if, among other things, their unearned income is over $1,250 (in 2023).

Do I have to report my child's investment income? ›

If your child's interest, dividends, and other unearned income total more than $2,300, it may be subject to a specific tax on the unearned income of certain children. See the Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income for more information.

What does the IRS consider a custodial parent? ›

The custodial parent is the parent with whom the child lived for the longer period of time during the year. However, the child will be treated as the qualifying child of the noncustodial parent if the special rule for children of divorced or separated parents (or parents who live apart) applies.

Videos

1. What is a Brokerage Account? Brokerages For Beginners : Standard, IRAs, Educational, Custodial
(Piece Of The Pie With Ty)
2. Why Is A 529 Better Than A Brokerage Account?
(Ramsey Everyday Millionaires)
3. Fees | How Investments Cost You
(The Plain Bagel)
4. CUSTODIAL BROKERAGE ACCOUNT BASICS 👶🐣👩‍🍼
(fortuneonfinance)
5. Paying More than $500 for Custodian Fees - You Need to Do This
(IRAFinancial)
6. Investment Accounts Needed for Financial Independence | FIRE in Less Than 10 Years
(Our Rich Journey)
Top Articles
Latest Posts
Article information

Author: Virgilio Hermann JD

Last Updated: 30/05/2023

Views: 6297

Rating: 4 / 5 (61 voted)

Reviews: 92% of readers found this page helpful

Author information

Name: Virgilio Hermann JD

Birthday: 1997-12-21

Address: 6946 Schoen Cove, Sipesshire, MO 55944

Phone: +3763365785260

Job: Accounting Engineer

Hobby: Web surfing, Rafting, Dowsing, Stand-up comedy, Ghost hunting, Swimming, Amateur radio

Introduction: My name is Virgilio Hermann JD, I am a fine, gifted, beautiful, encouraging, kind, talented, zealous person who loves writing and wants to share my knowledge and understanding with you.