Charles Schwab Custodial Accounts Highlights
- Schwab offers custodial accounts in UTMA and UGMA formats.
- Custodial accounts at Schwab have no annual maintenance fees.
- Online trades of U.S.-listed stocks and ETFs have $0 commissions.
- Custodial-account availability for non-U.S. residents depends on country-specific restrictions.
Are you looking for a way to save and invest money for a child or grandchild with potentially favorable tax treatment? Charles Schwab may have what you’re looking for.
Schwab’s Custodial Account
The Schwab One® Custodial Account is a brokerage account established for a minor. It is available in UGMA and UTMA formats. The UTMA is the newer format and is the one most states use today. In either format, the custodial account may receive favorable tax treatment and comes with low costs from Schwab. The account can be managed as either a self-directed account or through Schwab Intelligent Portfolios.
Available Investments
Self-directed custodial accounts at Schwab can buy and sell the following assets:
- Stocks, including OTC securities
- Options
- Funds, including mutual funds, closed-end funds, and exchange-traded funds
- Bonds and other fixed-income securities
A custodial account cannot be set up as a margin account, which means short selling is unavailable and many options strategies are not permitted. Intelligent Portfolios primarily invests in ETFs and also allocates part of the portfolio to cash held at Schwab Bank.
Custodial Account Fees and Commissions
Custodial accounts at Schwab established as brokerage (self-directed) accounts
pay no commissions on online trades of U.S.-listed stocks and ETFs. There is no fee to open or maintain the account, although a full outgoing asset transfer costs $50. Schwab requires no minimum deposit to open a self-directed custodial account.
A robo custodial account is a different story. The automated program requires $5,000 to open an account. Schwab charges no advisory fee or commissions through Intelligent Portfolios, although the underlying ETFs have operating expenses and part of the portfolio is held in cash at Schwab Bank.
Free Charles Schwab Custodial Account
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Tax Breaks
Besides the low pricing available at Schwab, a custodial account in either UTMA or UGMA format may
receive favorable federal tax treatment. An individual can contribute up to $19,000 per recipient in 2026
without using any lifetime gift-tax exemption. A married couple can generally contribute up to $38,000
if each spouse contributes $19,000 or the couple elects gift splitting. There is no set contribution limit
on a custodial account, and anyone can contribute to the account, not just family members.
For a dependent child with only unearned income, the first $1,350 is generally covered by the standard
deduction, and the next $1,350 is taxed at the child’s rate. Unearned income above $2,700 may be subject
to the kiddie tax at the parent’s marginal rate when the applicable age and support requirements are met.
Opening a Custodial Account at Schwab
A custodial account
can be opened on either Schwab’s mobile app or website. On the latter platform, look for the orange button at the top to open a new account. Scroll down to find the link that displays all accounts because the custodial account won’t appear in the initial list. On the next page, you’ll see a tile for “Education & Custodial.” Click on this tile to reach the appropriate section, where you’ll see the link for the custodial account.
On the mobile app, log in and tap the More icon in the bottom-right corner. The next page has a link to open an account. Scroll down until you see the option for the custodial account.
Schwab is unique in the industry by offering the custodial account 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 login credentials. U.S. residents can use the PDF form if they prefer.
Regardless of how a custodial account is opened, details about both the minor and the custodian will be needed.
Education for Youngsters
Schwab’s website has useful educational materials for beginners. 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, with a link located under the Learn tab.
There are self-guided courses on a variety of topics. Some of these can become rather complex, such as “Stock Trading with Technical Analysis,” while other materials are fairly basic:
- Your First Stock Trade
- Common Trading Mistakes to Avoid
- Dividend Basics
Charles Schwab Custodial Account Recap
Schwab offers an appealing custodial-account service with very low fees and useful educational materials to accompany it.
Free Schwab Custodial Account
Visit Schwab Website
Updated on 7/21/2026.
Chad Morris has been analyzing investment firms for Brokerage-Review.com since 2015. Backed by FINRA Series 65, 66, and SIE credentials, his work reflects a deep knowledge of the retail brokerage industry and digital trading tools.
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