(Bloomberg) — Wealthfront Corp. is rolling out a custodial account for parents who want to set their kids on an investing path at an early age.
The product, which is an automated investment account, is one of several new offerings from financial services companies targeting parents who want their kids to have a nest egg early. The product allows parents to put money into a diversified portfolio of exchange-traded funds. From there, they can choose from a conservative, moderate and aggressive mix of investments. The account also comes with automatic tax-gain harvesting, which is worth up to $1,350 in tax-free growth each year, the company said.
Parents manage the account until their child reaches adulthood, which can be between 18 and 25 depending on the state. The accounts have a $500 minimum and come with a .25% advisory fee.
“Custodial accounts are a flexible way to help parents help their children get ahead by starting to invest early. If you just had a kid, time is really on your side,” said Alex Michalka, vice president of investment research at Wealthfront.
Read More: How to Build a Million-Dollar Future for Your Kids
With Trump Accounts launching in July, a slew of products targeting investors under 18 are hitting the market this year. Since only US citizens born after Jan. 1 2025 get $1,000 with their Trump Accounts, other companies are jumping in to fill the gaps.
Wealthfront is offering a $100 sign-up bonus for parents who open an account by July 23, regardless of when their child is born. In March, Charles Schwab Corp. also launched its own custodial brokerage account, where teens can trade a mix of assets such as stocks, ETFs or mutual funds. Fidelity Investments and Robinhood Markets Inc. also have their own custodial accounts.
More than 3 in 5 teens say they’re very or extremely interested in learning more about investing, and about a quarter say they want their parents to be involved in helping them learn how, according to a 2026 Teen Investor Survey from Charles Schwab. So far, the company says “thousands” of parents have opened the new joint brokerage accounts.
Unlike Trump Accounts, Wealthfront’s new custodial account has no annual limit on how much parents can contribute (though anything more than $19,000 would trigger gift tax implications). Parents can also access the funds before their child turns 18 for anything, besides basics, that will benefit their kid.
Investment vehicles like 529 savings plans still offer greater tax savings and should come first, financial advisors say. Parents fund those accounts with after-tax dollars, their investments grow tax-free and money can be taken out with no tax liability, if it’s used for qualifying education expenses.
To contact the author of this story:
Sarah Foster in New York at [email protected]