5 Core Features for Youth Brokerage Accounts for Teens

The first step towards buying stocks under 18 is setting up a youth brokerage, otherwise known as as custodial account. Here's 5 core features to look for.

Investing App For Teens
Arrow Icon
The first step towards buying stocks under 18 is setting up a youth brokerage, otherwise known as as custodial account. Here's 5 core features to look for.

Finding An Investment App for Minors

To support a teenage stock trader, you need to find an app that is legally designed for minors. Finding a youth broker is the first step for buying stocks under 18.

Here are 7 key features your youth brokerage should have:

  1. Custodial Account Creation & or Support
  2. $0 Commission, $0 Fees, $0 Account Minimum
  3. Fractional Investments
  4. Learn To Earn
  5. Community/Live Support + Free Workshops

1) Youth Brokerage for Minors | UGMA/UTMA Custodial Account

A UGMA/UTMA Custodial Account allows minors to purchase assets under their own name. Custodial accounts must have a legal sponsor of 18+ who oversees the minor(s).

The UGMA/UTMA Sponsor does not have to be a legal guardian, parent or relative of the minor but the minor should choose someone they trust to help manage their money.

The custodial account will automatically transfer to the minor when they come of age (typically 18).

Unless an app explicitly supports either form of custodial account, trading as a teenager with it is illegal.

Trading With A Parent’s ID?

Although investing under a parent’s name won’t get you arrested, you’re certainly in the gray area and dancing around fraud, even with the parent’s permission. It’s important to note that even if you trust & have an agreement with the adult, you as a minor would never have legal or fiscal claims.

The parent will be fully responsible for taxes and declaring any stocks.

Overall: Trading under a parent’s name is not a good idea, especially since there are brokerages designed for youth under 18.

2) $0 Commission, $0 Fees or App Cost, $0 Account Minimum

Investment apps typically take a commission or a small profit off of every buy or sell you make. Fees are often added to this mess, quickly stealing away $1-$5/trade. For young investors, every dollar counts. Finding an investing app without commission and fees is a no-brainer.

Investment apps can lure you in with $0 commission and $0 fees only to enforce a lofty account minimum, or minimum deposit in their app. You’ll want to find an app with a $0 account minimum.

3) Fractional Investments

Young investors often choose to focus on bluechip, ETFs and other longterm, low risk investments. Bluechip stocks and reputable ETFs often have a greater stock price, limiting investment access. Not everyone can afford a $3k buy in.

A wonderful feature called fractional investing is a teenage stock trader’s best friend. Fractional investing allows investors to purchase fractions of shares. Through fractional investing, young investors can invest $5 in a company and receive proportionate shares.

Although small investments may not guarantee the same ownership, these small investments allow investors to diversify in large, reputable corporations instead of resulting to penny stocks, incredibly risky but affordable stocks.

4) Learn to Earn

Only 43% of GenZ is financially literate according to studies in 2021. Although learning from your mistakes is one way to build confidence, so is guided, interactive learning. Considering that only 21 states as of April 2021, require finance classes, finding a way to fully understand finance and investing should be utmost priority for young investors.

In-app learning modules on apps like Bloom, can help young investors understand how to buy stocks under 18.

“Learn to Earn” is a recent phenomena, especially within the finance community, where students are rewarded or even paid for learning (instead of the other way around). If you’re looking to improve your understanding of investing, keep an eye out for Learn to Earn features!

5) Community + Live Support

Especially for young investors, finding a community of supportive friends who are working towards their futures can build positive habits and lifelong friendships. You’ll also want live support and direct access to team members.

Gen Z startups especially excel at connecting directly with customers through online community platforms like Discord.

It’s a bonus if the community hosts free Investing 101 Workshops and connects young investors to personal finance resources and planning templates.

Bloom

Bloom is an investing app for teens and minors under 18 in the US. Here’s how we do:

✅ Custodial Account Creation & or Support

✅ $0 Commission and Fees

✅ $0 App Cost

✅ Fractional Investments

✅ $0 Account Minimum

✅ $0 Account Minimum

✅ Learn To Earn ($5 Stock Reward)

✅ Community/Live Support + Free Workshops

✅ $500k SIPC Insurance

❌ Crypto or Options trading

At the moment, Bloom does not support cryptocurrencies or options trading for the safety of new, young investors. Bloom encourages a focus on longterm, low risk investing for new investors.

Media Contact

Allan for Bloom

allan@joinbloom.co

Related Articles

5 Tips to Set Your Child up for Financial Success

5 Tips to Set Your Child up for Financial Success

75% of parents fail to raise financially responsible children. Here's how you can ensure financial success for your teen by passing down the correct and simple, financial lessons.

July 11, 2022
How to Get Investment Money Without A Job

How to Get Investment Money Without A Job

Stock competitions with $10k+ in prizes, entrepreneurship grants from $15k-$275k and how to prep for your financial future without a job.

March 24, 2022
What to look at when investing in a company?

What to look at when investing in a company?

5 beginner steps for picking quality stocks, and evaluating your investments as a teen.

March 4, 2022
Is Investing Worth It As A Teen? Yes & Here’s Why

Is Investing Worth It As A Teen? Yes & Here’s Why

You may have wondered if "investing is only for the rich" or if "investing is something to do after 18". Today, we'll debunk both myths.

February 23, 2022
Should You "Buy The Dip" As A Teen?

Should You "Buy The Dip" As A Teen?

How to overcome and manage risk in a red market, especially after a soaring year of market success.

January 30, 2022
Budgeting Without An Income As A Teen

Budgeting Without An Income As A Teen

Popular guides and articles simply skip over the concept of budgeting without an income - despite it being an essential concept for teens, students and low income communities.

January 17, 2022
A Teen's Profits From Investing $2/day at 13

A Teen's Profits From Investing $2/day at 13

What's investing, how it works, how to invest as a minor and what realistic profits from the stock market look like.

January 17, 2022
Maximize College Savings with Investing As A Teen

Maximize College Savings with Investing As A Teen

How investing in the stock market can optimize your college savings as a teen.

January 17, 2022
Dangers of Day Trading And Penny Stocks

Dangers of Day Trading And Penny Stocks

Dangerous endeavors of day trading and penny stocks, when investing becomes gambling, and how to loose your money 70% of the time.

January 15, 2022
How To Invest With Low To No Income

How To Invest With Low To No Income

Young people are often time rich but cash poor. Here's a simple, no BS guide to investing with a low to no income as a young investor.

December 29, 2021
How To Diversify Your Portfolio As A Teen

How To Diversify Your Portfolio As A Teen

Ever heard “don’t put all of your eggs in one basket?” that’s diversification and no, it’s not about safe farming practices. Here's what it means in the stock market.

December 27, 2021
10 Stock Categories For Young Investors

10 Stock Categories For Young Investors

10 ways to categorize stocks and 3 ones young investors should look out for. Young investors are time rich but cash poor so it's important to find stocks that compliment a teen investor's needs.

December 22, 2021
Finding Your Investor Identity

Finding Your Investor Identity

Everyone approaches the market differently. Investment strategies vary in frequency, amount, and stock types. By studying all of them, you can forge your own investing identity.

December 22, 2021
How to Start Investing in Stocks: A Teen's Guide

How to Start Investing in Stocks: A Teen's Guide

Investing, stocks, alpha, bullish - these terms have been flying around like crazy. We're here to break it down, specifically for teens. Enjoy this 5-minute read for 4 simple steps to start investing.

December 12, 2021