Getting Started With Stock Investments as a Minor: Age Requirements and Account Options

The Case for Starting Early

Compound returns—that’s the magic ingredient that makes early investing so powerful. The longer your money sits in the market, the more those returns multiply on themselves, transforming small contributions into substantial wealth over time. But beyond the math, there’s another advantage: teens who begin investing early develop financial literacy that serves them into adulthood.

Still, the question remains: What’s the legal minimum age you’ll need to buy stocks and other investments? The answer depends on the type of account you choose and whether an adult is helping you manage it.

How Old Must You Be to Invest?

If you’re operating solo: You need to be at least 18 years old to open and manage your own brokerage account, IRA, or any other investment vehicle independently.

If you have an adult partner: Several account structures allow minors under 18 to invest with parental guidance or a guardian’s oversight. The key distinction among these accounts comes down to control—specifically, who decides what to buy and sell, and who technically owns the assets.

Investment Account Types for Minors

Joint Brokerage Accounts: Shared Ownership and Decision-Making

Ownership structure: Both minor and adult Investment decisions: Shared between minor and adult Age requirement: Theoretically none, though brokers may set minimums

A standard brokerage account is for one person. A joint brokerage account, by contrast, puts two or more people on the title. Both parties own the investments and can participate in trading decisions—though the adult typically retains final say until the teen demonstrates readiness.

Any adult can establish a joint account for a minor, not just parents. The flexibility here is unmatched; you can invest in stocks, ETFs, bonds, mutual funds, and more. The tradeoff: there are no special tax advantages like you’d get with retirement-focused accounts.

Fidelity Youth™ Account: A Teen-Focused Option

• Ages served: 13–17
• Cost: Zero account fees, zero trading commissions, zero minimum balance
• Minimum investment: $1 per trade
• Extras: Free debit card with no ATM fees

Teens download the Fidelity Youth™ app to access their account and learn through interactive modules. Parents oversee activity via online statements and transaction alerts. When a teen completes educational content, Fidelity deposits reward dollars into the account.

Custodial Accounts: Adult Control, Minor Ownership

Ownership structure: Minor owns the assets Investment decisions: Adult makes choices Age requirement: Theoretically none, but brokers may impose limits

A custodial account lets an adult (typically a parent) manage investments on behalf of a minor. The minor legally owns everything inside—cash, stocks, funds—but the custodian controls what’s bought and sold. At the age of majority (usually 18 or 21, depending on your state), the minor gains full control.

Two main custodial structures:

1. UGMA (Uniform Gifts to Minors Act): Restricted to financial assets—stocks, bonds, ETFs, mutual funds, insurance. Adopted in all 50 states.

2. UTMA (Uniform Transfers to Minors Act): Allows financial assets plus physical property like real estate or vehicles. Adopted in 48 states (South Carolina and Vermont excluded).

Custodial accounts offer tax benefits. A portion of unearned income avoids taxation annually, while additional income is taxed at the child’s rate rather than the parent’s—a significant advantage for minors in low tax brackets.

Acorns Early: Automated Investing for Kids

• Subscription cost: $9/month (Acorns Premium tier)
• What it does: Rounds up everyday purchases to the nearest dollar and invests the difference
• Investment options: Diversified portfolios, starting with index funds
• Typical monthly investment: $30 average through round-ups

The Acorns platform makes micro-investing painless. Buy a $2.60 coffee, and 40 cents gets invested automatically. Once round-ups hit $5, they transfer to your investment account.

Custodial Roth IRAs: Retirement Accounts for Teen Earners

Ownership structure: Minor owns the assets Investment decisions: Adult (custodian) manages Age requirement: Minor must have earned income; no age floor otherwise 2024 contribution limit: Up to $7,000 or 100% of earned income, whichever is less

If you’ve worked—babysitting, summer jobs, freelancing—you have “earned income” in the IRS’s eyes. That qualification opens the door to a custodial Roth IRA, where you contribute after-tax dollars that grow tax-free forever.

Why Roth for young people? At your income level, you likely pay little to no taxes now. Locking in that favorable rate and watching decades of compound growth unfold is the payoff. Early withdrawals before age 59½ face penalties, but that’s precisely the point—it forces long-term thinking.

E*Trade IRA for Minors: A Top Custodial Roth Option

• Platforms: Web and mobile apps (iOS, Android)
• Investment menu: Thousands of stocks, bonds, ETFs, mutual funds
• Trading costs: $0 commissions on stocks, ETFs, and mutual funds
• Robo-advisory option: Available through Core Portfolio service

E*Trade’s custodial IRAs combine zero-commission trading with educational resources including webinars, articles, and live events.

What to Invest In: Three Core Choices

Individual Stocks

Owning shares means holding a fractional stake in a company. If the business thrives, your stock appreciates. If it stumbles, your stake loses value. The engagement factor is high—you research companies, follow news, discuss picks with peers.

Mutual Funds

Mutual funds pool investor capital to buy dozens, hundreds, or thousands of securities simultaneously. This diversification cushions losses. If one holding tanks, dozens of others stabilize your portfolio. The trade-off: annual expense ratios that reduce returns.

Exchange-Traded Funds (ETFs)

ETFs resemble mutual funds but trade throughout the day like stocks. Most index-tracking ETFs are passively managed, meaning no human fund manager is constantly buying and selling. This passive approach typically costs less and often outperforms actively managed alternatives, making ETFs ideal for younger investors seeking broad market exposure.

The Power of Starting Young

Compound Growth in Action

Deposit $1,000 at 4.0% annual yield. After year one, you’ve earned $40, bringing your balance to $1,040. Year two, that $1,040 earns 4.0%, yielding $41.60 and a total of $1,081.60. Your money is earning returns on returns. Over decades, this effect becomes transformative.

Building Lifelong Discipline

Saving and investing aren’t one-time acts—they’re habits. By developing a routine early, you normalize setting aside money for future goals: a car, a home, a secure retirement. What starts as a teen challenge becomes an adult necessity.

Weathering Market Cycles

Stock markets rise and fall in cycles. If you begin investing in your teens, you have years—potentially decades—to ride out downturns and benefit from recovery. You also have flexibility to adjust your savings strategy as life circumstances change.

Alternative Accounts: For Parents Saving on Your Behalf

529 Education Savings Plans

Parents open these to fund future education costs (tuition, fees, room and board, books, student loans). Contributions grow tax-free. Withdrawals for non-qualified expenses face taxes and a 10% penalty, though exceptions exist (military academy attendance, disability, scholarships).

Education Savings Accounts (Coverdell ESA)

Similar to 529s but with lower contribution caps ($2,000 annually until age 18) and income limits for filers. Funds must be used for K–12 or college expenses before the beneficiary turns 30.

Parent’s Standard Brokerage Account

Parents can simply invest through their own account with no contribution limits and complete flexibility on how funds are used. The drawback: no tax-free growth like 529s and ESAs provide.

The Bottom Line

At age 18, you can open and control an investment account entirely on your own. Before that, partner with a parent or guardian through joint, custodial, or retirement-focused accounts. Regardless of which structure you choose, starting young compounds your advantages: more time for growth, better habits, and the resilience to weather market volatility. Whether your age allows independent investing or requires adult collaboration, the sooner you begin, the sooner compound returns start working in your favor.