Charles Schwab age requirement

Age Requirement: How Old Do You Have To Be To Open a Charles Schwab Account in 2022

Charles Schwab age limit. How old do you have to be to open an investment or IRA account at Charles Schwab brokerage?

Charles Schwab Age Requirement

The minimum age to open a Charles Schwab brokerage account in the United States by oneself (without the help of a custodian) is 18. Before the age of 18, it is still possible, but will require some assistance from a guardian. Read on for more details.

Age of Majority

The age of majority is the legal term for waking up one morning and being called an adult, at least by the government anyway. This is typically 18 in most U.S. states, although some jurisdictions do have different ages for different activities. For opening a regular taxable brokerage account, the age requirement is 18.

Different brokerage accounts have different requirements, and this is where it becomes possible for persons under the age of majority to open investment accounts. Some brokerage firms based in the United States may have a higher age requirement to open a foreign account.

Custodial Accounts

There are two custodial account types in the United States: the Uniform Transfers to Minors Act (UTMA) account and the Uniform Gifts to Minors Act (UGMA) account. Both are very similar and have the same tax breaks. The UTMA account is newer and can hold physical property like real estate, while the UGMA can only hold securities. Most states have adopted the UTMA, although there are a few holdouts.

To open a custodial account, two people are needed: a custodian (as the name implies), who is the adult overseeing the account, and a minor under the age of majority. This is one way legal minors can have brokerage accounts.

The custodian does not necessarily have to be the one who contributes assets to the account. The grantor does that, and there can be multiple grantors. The custodian can be both a grantor and a custodian.

In all of these potential scenarios, the assets that go into the account belong to the minor, whose name and birthday are listed on the account. When the minor reaches the age of majority, every dime in the account belongs to him, and the custodian loses all access to the account.

If the grantors ever change their mind and want to withdraw the contributions they made before the minor reaches the age of majority, they’re out of luck. Deposits into a custodial account are irrevocable.

For the purposes of custodial accounts, the age of majority can be anywhere from 18 to 25, depending on the state. This is when the account is turned over to the minor.

Funds inside a custodial account can be used for any expense under the sun, not just education costs. For this reason, parents and grandparents may prefer other types of investment accounts.

Where to Open a Custodial Account

TD Ameritrade is probably the most popular choice for a brokerage custodial account. There are no account fees, commissions on stocks and ETFs are $0, and you get a huge list of benefits by investing with one of the largest brokers in the world.

How Old Do You Have To Be To Open a Charles Schwab Account

Open TD Ameritrade Account

Open TD Ameritrade Account

Coverdell Education Savings Plan

Enter the Coverdell Education Savings Plan. Assets in a Coverdell account can only be used for education expenses at any level. As with UTMA/UGMA accounts, there must be a beneficiary under the age of 18 to get the account opened.

Although parents and grandparents are usually the people opening Coverdell accounts, organizations can contribute to them. There are no income limits on institutions doing this, although individuals do face income limits on Coverdell contributions.

529 Plans

Next up is the 529 plan, which is the most popular investment account for minors nowadays. This one differs from the Coverdell in that account assets can only be used to pay for higher education. But like the other minor accounts covered in this article, the account must have a custodian and a minor beneficiary. As with the other two account types, a 529 plan comes with various tax advantages (and possible disadvantages) compared to regular brokerage accounts.

Opening a 529 plan might be a little more cumbersome than the other two account types already mentioned as many online brokerage firms don’t offer them.

Minor IRA

The final account we’re going to mention here is an IRA for adolescents. This is similar to any other Individual Retirement Account with the exception that the account has a custodian and beneficiary under the age of 18 (like the custodial accounts mentioned already).

The one caveat with this IRA is that the legal minor must have earned income in order to make contributions to the account. This of course is the same rule that regular IRAs have.

Finding Brokerage Accounts for Minors

Many, but not all, brokerage firms today offer some of the accounts listed above. To open one, you can usually fill out an online application just as with a regular brokerage account, although some of the minor accounts listed here are so exotic that a brokerage house may require a paper form.

Some broker-dealers may have one or two of the above accounts, but not all. For example, M1 Finance offers a Minor IRA but not a 529 plan. tastyworks offers none of the custodial accounts mentioned in this article. Vanguard has the 529 but not the Coverdell account.

Nowadays, most brokerage accounts for minors have the same pricing schedule as regular brokerage accounts. This means very low fees and zero commissions on equity trades. Learning materials for investing, however, can vary significantly.

Some broker-dealers may also allow a custodial account to be set up as an automated investing account, which takes a big part of the guesswork out of the equation.

The lesson here? Do your homework before opening an account.

Open TD Ameritrade Account

Open TD Ameritrade Account

About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for, Chad can usually be found managing his portfolio or building a new home computer.