Family & Kids Savings

A custodial account under the Uniform Gifts to Minors Act that holds assets for a minor until they reach the age of majority, usually 18 or 21 depending on the state. It lets an adult transfer financial assets like cash, stocks, bonds, and mutual funds to a child without creating a trust, with a custodian managing it until the child takes over. Unlike a 529 plan limited to education, the funds can be used for any purpose once the child gains control.

A custodial account under the Uniform Transfers to Minors Act that lets an adult custodian hold and manage assets for a minor until the child reaches the age set by state law. The assets belong to the child as an irrevocable gift, but the custodian manages them until control transfers to the beneficiary. Unlike a UGMA account, it can hold a broader range of assets, including real estate, royalties, and fine art, and unlike a 529 plan it isn’t restricted to education expenses.

A tax-advantaged education savings account designed to help pay for qualified education expenses for a named beneficiary. Treated by the IRS as a qualified tuition program, its earnings grow tax-free and withdrawals are federally tax-free when used for eligible costs like tuition, fees, books, and certain room and board. The account owner keeps control of the funds and can change the beneficiary to another qualifying family member.

A tax-advantaged account, usually a Coverdell ESA, created to pay a designated beneficiary’s qualified education expenses. Earnings grow tax-free and qualified withdrawals are tax-free, and unlike some college-only tools it can cover both K-12 and higher education costs. Its main limits are a $2,000 annual contribution cap per beneficiary, income phaseouts, and age-based rules, so it usually works best alongside a larger plan like a 529.

A Roth IRA opened and managed by an adult custodian for a minor who has legitimate earned income, not a special child-only account. It grows tax-free and qualified retirement withdrawals are also tax-free. The child must have documented earned income, and the contribution limit is $7,500 for 2026 or the child’s taxable compensation for the year, whichever is lower, with the adult managing it until the child reaches the age of majority.

An investment account an adult opens to invest on a child’s behalf, giving contributions decades to benefit from compound growth. Depending on the goal, it can take several forms: a custodial UTMA or UGMA account for flexibility, a 529 plan for education, a custodial Roth IRA if the child has earned income, or a teen investing account for hands-on learning. Ownership rules differ by type, which affects taxes, financial aid, and when the child gains control.