Have you ever caught your 10-year-old scrolling through stock charts instead of playing video games? Or maybe your teenager has been asking about Bitcoin after hearing about it from friends? You’re not alone! More kids these days are curious about investing, and honestly, it’s never too early to start teaching them about money.
According to Fidelity’s 2023 Teens and Money Study, a whopping 91% of teens say they definitely plan to invest in the future. And guess what? Three out of four plan to start before they even graduate from college!
But here’s the million-dollar question (pun intended): Can kids actually buy stocks? The short answer is yes—but with some grown-up supervision. Let’s break it down.
Why Getting Kids Started with Investing Is Kinda Genius
Before diving into the “how,” let’s talk about the “why” for a sec. The secret ingredient to investment success isn’t picking the hottest tech stock—it’s TIME.
Thanks to our friend compound interest (aka the eighth wonder of the world), money invested early has an incredible opportunity to grow. Check this out:
Let’s say someone starts investing at age 13:
- They save $500 per year from ages 13-19
- Then $1,000 per year from ages 20-24
- Then $3,000 per year from 25 until retirement at 67
Compare that to someone who waits until age 25 to start investing $3,000 each year until 67.
The early bird ends up with significantly more money—all because they started earlier! The person who started later would need to save a lot more each year to catch up.
This isn’t just theory—it’s math, folks! And it works for short-term goals too, like saving for college or a first car.
So How Can Kids Invest? 7 Ways to Get Started
Since minors can’t open brokerage accounts on their own (you gotta be at least 18 for that), parents and guardians need to step in. Here are the main ways to help your kid start building that portfolio:
1. Custodial Brokerage Accounts
How it works: These accounts are opened by an adult (that’s you) on behalf of a minor. You manage it, but the money legally belongs to your child.
Types: There are two flavors:
- UGMA accounts – For financial assets like stocks, bonds, and cash
- UTMA accounts – These can include property and other tangibles too
Contribution limits: No limits! But watch out for gift tax rules if you’re dumping large amounts in there.
The catch: When your kid reaches 18 or 21 (depends on your state), they get full control of the account. So if you were hoping that money would go to college tuition and they decide a sports car is more their style… well, it’s their call!
2. Roth IRAs for Kids
This is my personal favorite option if your kid has earned income (yes, babysitting and lawn mowing count!).
How it works: It’s just like a regular Roth IRA, but opened by a parent as custodian for the minor.
Why it’s awesome: Money grows tax-free and can be withdrawn tax-free after age 59½. But here’s the cool part—contributions (not earnings) can be withdrawn anytime without taxes or penalties.
Contribution limits: For 2025, it’s $7,000 or the amount of earned income, whichever is lower.
Pro tip: Your child doesn’t have to use their actual earnings to fund the Roth. If they earned $2,000 babysitting but want to spend it on, I dunno, whatever teenagers buy these days, you can contribute $2,000 of your money to their Roth IRA (up to what they earned).
3. 529 Savings and Investment Accounts
If college is the goal, a 529 plan might be your best bet.
How it works: These education-specific investment accounts grow tax-free when used for qualified education expenses.
Types: There are general 529 college savings plans and prepaid plans (where you lock in tuition rates early).
Tax benefits: Many states offer tax deductions for contributions.
4. Stock Trading Accounts for Teens
For teens itching to make their own investment decisions, some brokerages are catching on.
How it works: Fidelity, for example, offers a Youth Account for teens 13-17. Unlike custodial accounts, teens make their own investment decisions (with parental oversight).
Cool features: No account minimums, no fees, and some even offer debit cards with no ATM fees.
5. ABLE Accounts
For kids with disabilities, ABLE accounts offer a way to save without losing eligibility for public benefits.
How it works: Named for the Achieving a Better Life Experience Act, these 529A accounts allow tax-free growth for qualified disability expenses.
Eligibility: Available to people whose disability began before age 26 (increasing to 46 in 2026).
Contribution limit: $19,000 in 2025, with additional contributions allowed for working account owners.
6. Special Needs Trusts
Another option for children with disabilities.
How it works: These trusts can be funded and managed by parents without affecting government benefits.
Types: Third-party, first-party, and pooled trusts.
7. Trump Account (Pilot Program)
A brand new option introduced in the “One Big Beautiful Bill Act.”
How it works: Children born between January 2025 and December 2028 receive a $1,000 government-funded deposit invested in a stock index fund.
Contribution limits: Parents can add up to $5,000 annually until the child turns 18, and employers can contribute up to $2,500 per year.
How to Get Started: A Step-by-Step Guide
Ready to turn your little one into the next Warren Buffett? Here’s what to do:
1. Pick the Right Account Type
Consider your child’s situation:
- Do they have earned income? → Consider a Roth IRA for Kids
- Saving for college? → 529 plan
- Want general investing experience? → Custodial brokerage account
- Have a disability? → ABLE account or special needs trust
2. Choose a Broker
Look for these features:
- No account minimums
- No maintenance fees
- Commission-free trades
- Good educational resources
Some top options include:
- Fidelity
- Charles Schwab
- TD Ameritrade
- E*TRADE
- Vanguard
3. Open the Account
This typically takes about 15 minutes online. Have ready:
- Your Social Security number
- Your child’s Social Security number
- Both your dates of birth
- Contact information
4. Fund the Account
Link your bank account to transfer money into the investment account. This might take a couple of days to process.
5. Help Your Kid Choose Investments
This is the fun part! I suggest a two-part approach:
First, let them pick 1-2 individual stocks of companies they know and love. Maybe they’re obsessed with Disney or can’t stop playing Roblox. Owning even a single share can get them excited about tracking “their” company.
Second, put the bulk of the money in low-cost index funds or ETFs. These provide instant diversification and are less risky than individual stocks.
Check earnings together every few weeks and compare short-term fluctuations with longer-term changes on quarterly statements. This can spark great conversations about money, patience, and planning for the future.
FAQs About Kids Investing
How old does my child have to be to buy stocks?
To invest completely independently, they need to be 18. Before that, they’ll need a custodial account or a special teen account like Fidelity’s Youth Account (available for ages 13+).
Can you withdraw money from a custodial account?
Yes, but only for expenses that benefit the minor. And remember: once you put money in, it legally belongs to the child—you can’t take it back for yourself.
Who pays taxes on a custodial account?
The child does! This is called the “kiddie tax.” For 2025, the first $1,350 of unearned investment income is tax-free. Income between $1,350-$2,700 is taxed at the child’s rate (usually low), and anything over $2,700 gets taxed at the parent’s rate.
Can my 5-year-old really invest if they don’t have a job?
For a custodial brokerage account, yes—no earned income required! For a Roth IRA, they’ll need earned income, but this could be from age-appropriate work like modeling for a commercial, appearing in a play, or helping with simple chores if you’re paying them.
The Bottom Line: It’s Never Too Early to Start
I remember when my dad bought me my first share of stock when I was 10. It was only worth about $30, but watching that value go up and down was more exciting than any video game. Twenty years later, I still have that stock (it split several times!), and the lessons I learned were even more valuable than the investment itself.
Teaching kids about investing isn’t just about building wealth—it’s about building good money habits, understanding delayed gratification, and learning to think long-term. In a world of instant everything, these are rare and valuable skills.
So, can kids buy stocks? With your help, absolutely! And starting early might be one of the best financial gifts you ever give them.
Have you started investing with your kids? What approaches have worked for your family? Drop a comment below—I’d love to hear your experiences!
