How to Choose the Right Custodial Account
Written by Arjun Shekdar
Last week, we talked about the process of opening your custodial account, and why you should open one up. Today, we’re moving ahead, and focusing on the million dollar question: Which account should I choose?
To be 100% honest, the answer depends on what you’re looking for – if you want ideal mutual funds, I’d go with Vanguard, as they’re reputably strong for fund-focused investors, if you’re looking for low fees and variety, Fidelity Investments is the way to go, as they offer extensive investment options and fractional shares, with no fees or minimums. There’s many different factors that enter the field of play for custodial accounts, but for me, when it comes to the best account overall, Charles Schwab is the first that comes to mind.
Why Should I Consider Charles Schwab?
While I personally think Charles Schwab is the best available option for teenagers, I’m still very fond of other brokers like Fidelity, Vanguard, E-Trade, Merrill Edge, and more. While they’re all great brokers and competition, Schwab stands out more to me than any of them due to top notch reputation for customer service, an incredibly vast range of investment options, and minimal fees. Their accounts offer fractional shares of S&P 500 companies starting at only $5, an incredibly affordable price for an investment opportunity. Schwab is the golden package when it comes to custodial accounts – it plays well in every aspect, including service, fees, affordability, and the never ending options of investments they offer.
Should I Choose the Schwab One or the Schwab Intelligent Custodial Account?
The Schwab One Custodial Account offers no commission for buying and selling stocks and ETFs (Exchange Traded Funds). There’s no minimum deposit for opening an account, and there’s no maintenance fees.
Schwab Intelligent Portfolios support custodial accounts, and are the company’s robo-advisor services that help users to start and maintain their diverse portfolio(s). However, Schwab Intelligent Custodial Accounts require a minimum $5,000 deposit to open
In conclusion, it really depends where you are money-wise. If you’re starting with less, then the Schwab One account is the answer for you, if not, I’d suggest taking a look at the Schwab Intelligent account, as the services are off the charts, and can only further grow your money tree. At the end of the day, there’s no real “better account” you can pick from between the two, it all depends on your situation.
The same thing applies when you’re choosing your broker, the decision for you is all based on what you look for, whether it’s all-around great, minimal fees, ideal mutual funds, simplicity, and many more. For me, Charles Schwab is the best candidate, as I look for all around quality and consistency, but that decision is not to put down or discourage the idea of other brokers, choosing the right custodial account all comes down to where you are, and where you’re looking to go.
Sources:
