Charles Schwab Custodial Accounts Highlights
- Schwab offers custodial accounts in both UTMA and UGMA formats.
- Custodial accounts at Schwab do not have annual fees.
- Some trades placed inside a custodial account are commission-free.
- Both U.S. and non-U.S. residents can open custodial accounts at Schwab.
Are you looking for a way to set aside money for a child or grandchild in a tax-advantaged account? Charles Schwab may offer exactly what you need.
Schwab’s Custodial Account
The Schwab One® Custodial Account is exactly what the name suggests: a brokerage account established for a minor. It is available in both UGMA and UTMA formats. UTMA is the newer structure and is the version used by most states today. In either format, the custodial account offers some appealing tax advantages along with Schwab’s low pricing. It is possible to open the custodial account in either self-directed or automated format.
Available Investments
Self-directed custodial accounts at Schwab can trade the following assets:
- Stocks, including OTC securities
- Options
- Funds (mutual, closed-end, and exchange-traded)
- Bonds and other fixed-income products
It is not possible to set up a custodial account as a margin account, which means short selling is not allowed, and many option strategies are completely unavailable. Intelligent Portfolios, Schwab’s robo program, invests only in ETFs.
Custodial Account Fees and Commissions
Custodial accounts at Schwab that are set up as brokerage (self-directed) accounts receive
$0 commissions on online trades of U.S.-listed stocks and ETFs. There is no fee to open the account, and there are no fees to maintain or close it. Schwab does not require any minimum deposit to open a custodial account in self-directed mode.
A robo custodial account is somewhat different. The automated program requires $5,000 to open an account in any tax format. Schwab does not charge any management fees on robo accounts beyond the expense ratios on the underlying ETFs.
Free Charles Schwab Custodial Account
Visit Schwab Website
Tax Breaks
In addition to Schwab’s attractive pricing, a custodial account in either UTMA or UGMA format will
come with some useful tax advantages from Uncle Sam. The first $19,000 worth of contributions in 2026
from one individual is exempt from gift tax. Married couples get double that amount. There is no
contribution limit on a custodial account, and literally anyone can add money to the account (not
just family members).
After contributions are deposited into the account, investment earnings below $1,350 in a calendar year are tax-free.
The next $1,350 in earnings is taxed at the minor’s rate, which is usually quite low.
Opening a Custodial Account at Schwab
A custodial account
can be opened through either Schwab’s mobile app or website. On the website, look for the orange button at the top to open a new account. Scroll down to find the link to display all account types (the custodial account will not appear in the initial list). On the next page, you’ll see a tile for “Education & Custodial.” Click on this tile to reach the proper section, and you’ll see the link for the custodial account.
On the mobile app, sign in and tap on the More icon in the bottom-right corner. The next page has a link to open an account. Scroll down until you find the custodial account option.
Schwab is unique in the industry because it offers custodial accounts for non-U.S. residents. They must use a hard-copy application to open an account. The completed form can be uploaded on Schwab’s website through the Message Center (assuming you already have a login). U.S. residents can also use the pdf form if they prefer.
No matter how a custodial account is opened, information on both the minor and the guardian will be required.
Education for Youngsters
Schwab’s website offers some helpful educational materials that beginners can use. A good place to start is under the Learn tab at the top of the website. For complete beginners, there is a New Client Welcome Center (the link appears under the Learn tab).
There are self-guided courses on a variety of topics. Some of them can be fairly advanced, such as “Stock Trading with Technical Analysis,” while others are much more basic:
- Your First Stock Trade
- Common Trading Mistakes to Avoid
- Dividend Basics
Charles Schwab Custodial Account Recap
Schwab has an appealing custodial-account service with very low costs and some helpful educational materials to go with it.
Free Schwab Custodial Account
Visit Schwab Website
Updated on 3/14/2026.
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 Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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