can under 18 buy stocks? A practical guide

Can under 18 buy stocks?

Can under 18 buy stocks? Short answer: in the U.S., minors generally cannot open a standard, independent brokerage account until they reach the age of majority (commonly 18), but they can own or benefit from stock investments through legal vehicles that involve an adult custodian, guardian, or specially designed teen accounts. This guide explains how can under 18 buy stocks, the legal context, account types, tax and transfer rules, practical steps to get started, common restrictions, and trusted educational resources for parents and teens.

Market context: As of 2026-01-21, markets showed choppy activity: the Nasdaq closed down 0.66%, the S&P 500 down 0.38%, and the Dow down 0.29%, with small-cap Russell 2000 performing well. This environment highlights why supervision and education matter when minors consider market exposure.

Overview of legal and regulatory context

The basic rule in most U.S. brokerages is clear: can under 18 buy stocks directly on their own? No — brokerage firms typically require account holders to be at least 18 (the age of majority in most states). Federal regulators such as the SEC and FINRA set investor-protection rules and broker-dealer standards; state laws (including UGMA/UTMA custodial statutes) determine how custodial property is handled and when control transfers to the beneficiary.

State variations matter. Some states set the custodial-transfer age at 18; others allow the custodian to set transfer at a later age (commonly 21). Outside the U.S., ages of majority and brokerage rules differ, so local law should always be checked.

This legal framework shapes the practical answer to "can under 18 buy stocks": minors can own stocks, but the legal mechanisms and account structures require adult involvement or specially designed teen products.

Account types and legal ways minors can invest

There are several common legal vehicles through which minors can acquire exposure to stocks. Each option has distinct ownership, control, tax, and transfer implications. Understanding the differences helps parents and teens choose the right path.

Custodial accounts (UGMA / UTMA)

Custodial accounts created under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA) are the most common way for minors to hold stocks.

• What they are: An adult (custodian) manages the account for the minor (beneficiary). Assets are legally owned by the minor but controlled by the custodian until the transfer age.
• What can be held: Stocks, ETFs, mutual funds, cash and, under UTMA, some other asset classes depending on state law.
• Control and transfer: Custodian makes investment decisions. At the state-specified age (often 18 or 21), the assets transfer outright to the beneficiary.
• Pros: Simple to set up; gives legal ownership to the child; can be used for gifts and long-term saving.
• Cons: Assets become the child’s once they reach majority (no strings attached); custodial assets may affect financial aid; tax rules (including the "kiddie tax") can apply.

If you ask "can under 18 buy stocks using a custodial account?" the practical answer is yes — the custodian buys on behalf of the minor, and the minor is the legal owner.

Guardian/parental brokerage accounts and joint accounts

Guardian or parental accounts are held in the adult’s name. The adult retains legal ownership and control even if the child is named on statements.

• Key difference from custodial: Ownership stays with the adult; transfers at majority are not automatic.
• Use cases: Parents who want to keep control of assets or avoid counting them as the child’s property for financial-aid purposes may prefer this route.
• Tax treatment: Income typically reported on the adult’s tax return.

As a rule, these accounts mean minors do not directly own the stocks, though they may benefit economically.

Teen-owned brokerage products (youth accounts)

Brokerages and fintech firms now offer teen-focused products that blend parental oversight with teen access. Examples include youth investing accounts from major brokerages and fintech platforms (many provide ages 13–17 access with parental setup).

• How they work: An adult opens and controls the account; the teen often gets a login to view balances and can request trades that the adult approves or that execute under preset permissions.
• Restrictions: No margin trading, no options, and many prohibit certain asset classes like some cryptocurrencies or IPO allocations.
• Examples: Fidelity Youth Account and several fintech teen-investing products illustrate the model of teen education + supervised access.

When parents and teens ask "can under 18 buy stocks via teen accounts?" the answer is that teens can participate actively, but legal ownership and final control remain structured by the adult-led account rules.

Custodial Roth IRA (Roth IRA for minors)

Minors with earned income can contribute to a Roth IRA in their own name, typically held as a custodial Roth IRA until they reach majority.

• Requirements: The minor must have earned income (wages, self-employment income).
• Benefits: Contributions grow tax-free and qualified distributions are tax-free; excellent for long-term compounding.
• Limits: Annual contribution limits equal the lesser of earned income or the annual Roth IRA cap.

Custodial Roth IRAs are a powerful way for teens with part-time jobs to start tax-advantaged retirement savings early.

529 college savings plans and other savings vehicles

529 plans are not direct stock accounts but invest in portfolios that typically include mutual funds and ETFs.

• Ownership: Accounts are usually owned by an adult (account owner) with the child as beneficiary; the account owner controls distributions.
• Use case: Education savings with tax advantages for qualified withdrawals.
• Investment exposure: Many 529 investment options include equity allocations, offering market exposure without direct stock ownership by the minor.

Gifts and transfers of shares

Adults can gift shares to minors; in practice, gifts to minors are often held in custodial accounts.

• Process: Transfer shares into the custodial account or transfer ownership where state and brokerage rules permit.
• Tax: Gifts have gift-tax implications beyond annual exclusion amounts and influence whose tax return reports income from the asset.

Gifting is a common way to seed a child’s investment account while teaching them about long-term ownership.

How brokerages and platforms handle minors

Most mainstream brokerages require customers to be at least 18. However, brokerage policies for teen or custodial products vary.

• Custodial account process: Adult provides identification and the minor’s SSN; the broker opens the account in the minor’s name with the adult as custodian.
• Youth or teen accounts: Many require the adult to be a verified account owner or custodian, provide oversight tools, and restrict certain trades.
• Platform variation: Some providers offer teen logins with trade requests; others give limited direct trading capabilities to teens.

Fidelity’s Youth Account is a well-known example of a teen-focused product (ages 13–17) that provides access to stocks and ETFs under parental control. Other fintech products emphasize education, parental controls, and custodial structures.

If you are shopping for a platform, look for clear custodial terms, educational resources, commission structures, available securities, and safety features. For crypto or web3 custody, consider Bitget Wallet integration and Bitget’s educational resources where available.

Investment options and typical restrictions for minors

What can minors buy through custodial or teen accounts?

• Commonly allowed: U.S. stocks, many ETFs, mutual funds (depending on platform), and fractional shares where offered.
• Commonly restricted: Margin trading, options, short selling, many IPO allocations, and in many cases direct cryptocurrency trading.
• Fractional shares: Enable small-dollar investing, making stock ownership accessible even without large sums.

Always confirm with the chosen brokerage which asset types are allowed in their custodial or teen accounts, as product features change over time.

Taxation and reporting for minor-owned accounts

Taxation for accounts that involve minors has distinct features.

• Custodial accounts: Income (dividends, interest, capital gains) may be taxed to the child up to certain thresholds. Above those thresholds, the "kiddie tax" can cause unearned income to be taxed at the parents’ marginal rate.
• Guardian accounts: Income is typically reported on the adult’s tax return.
• Gift tax: Large gifts may require gift-tax filings beyond the annual exclusion.
• Roth IRA: Contributions must come from earned income and grow tax-free for qualified withdrawals.

Parents should consult a tax professional for specific reporting responsibilities, and keep records of contributions, gifts, and transfers.

Ownership, control, and transfer at majority

One of the most important practical answers to "can under 18 buy stocks" concerns what happens when the child reaches majority.

• Custodial accounts: Assets transfer to the beneficiary at the UGMA/UTMA-specified age. After transfer, the beneficiary controls the assets outright.
• Guardian/parental accounts: No automatic transfer; the adult retains ownership unless they choose to transfer assets.
• Planning: Parents may wish to discuss expectations and financial education with teens before transfer age to prepare them for stewardship of assets.

Documenting intentions and having a plan for financial education reduces the risk of impulsive decisions when control transfers.

Practical steps to get started (for teens and parents)

1. Learn the basics. Start with investor-education resources from regulators and reputable financial educators.

2. Decide the goal. Is the account for long-term investing, college, retirement, or teaching? Goals influence the account type.

3. Choose the vehicle. Compare custodial UGMA/UTMA, teen-focused brokerage products, custodial Roth IRAs, and 529 plans.

4. Select a platform. Look for custodial support, clear terms, low fees, educational tools, and safety. For crypto or web3 exposure, consider Bitget Wallet and Bitget’s platform resources.

5. Gather documents. Adult and minor IDs, Social Security numbers, proof of earned income (for Roth IRA), and funding sources.

6. Open and fund the account. Start small — use diversified ETFs or fractional shares as an educational, low-cost approach.

7. Set rules. Decide how trade approvals work, frequency of reviews, and educational milestones.

8. Monitor and teach. Use regular check-ins to review performance, lessons from market cycles, and the importance of diversification.

These steps answer the practical question of how can under 18 buy stocks in a safe, educational way.

Risks, investor protections, and supervision

Market risk applies equally to accounts for minors. Additional considerations:

• Scams and social pressure: Teens may face online trading pressure or social-media-driven hype. Supervision and media-literacy education help mitigate that risk.
• Platform protections: Ensure the broker has robust security, two-factor authentication, and clear custodial disclosures.
• Regulatory resources: The SEC and FINRA provide investor-education materials aimed at young investors and their families.

Parental supervision and structured learning are key to reducing risk while building financial skills.

State and international differences

UGMA/UTMA rules, the age of majority, and transfer ages vary by state. Outside the U.S., the legal age and brokerage policies differ. Always verify:

• Your state’s custodial-transfer age and permitted custodial assets.
• Brokerage-specific age requirements for teen products.
• Local tax and gift rules if you are outside the U.S.

When in doubt, consult a local attorney or tax advisor to confirm state or national rules.

Frequently asked questions (FAQ)

Q: Can under 18 buy stocks on their own?
A: No — most brokerages require account holders to be 18 or older. Minors can own stocks through custodial or adult-owned accounts, or participate via teen-focused products.

Q: Can under 18 buy stocks via a custodial account?
A: Yes. Custodial accounts let adults buy stocks on behalf of minors; the minor is the legal owner but cannot independently trade until reaching majority.

Q: When do custodial assets become mine?
A: Custodial assets transfer at the age specified by state law or the UTMA agreement (commonly 18 or 21). At that point, the beneficiary controls the assets.

Q: Can minors open Roth IRAs?
A: Yes, if they have earned income and an adult acts as custodian until the minor reaches majority.

Q: Will custodial assets affect financial aid?
A: Custodial assets in the student’s name can reduce need-based aid eligibility more than parent-owned accounts. Families should plan strategically.

Q: How should parents teach safe investing?
A: Start with basic diversification, use low-cost index ETFs or fractional shares, review periodic statements together, and emphasize long-term thinking.

Q: Are there teen accounts that let a minor trade themselves?
A: Some teen-focused products allow a teen login and the ability to suggest trades or place trades under parental approval. Full independent trading is rare before 18.

Q: Can under 18 buy stocks as gifts?
A: Yes — adults can gift shares, which are often placed in a custodial account for management until the child reaches majority.

Educational resources and recommended reading

• SEC Investor.gov: Practical investor education and materials for young investors.
• Investopedia: Guides on the stock market for teens and custodial accounts.
• Bankrate: How to invest as a teenager.
• Greenlight: Materials on investing under age 18 (custodial and teen accounts).
• Copper, TeenVestor, EarlyBird: Fintech and educational guides focused on teen investing.
• Fidelity Youth Account: Brokerage-specific details and features for teens.

Use simulated trading (paper trading) and educational tools before committing significant funds.

References and further reading

• Greenlight — Investing in stocks under age 18 (custodial and teen accounts).
• Bankrate — How to invest as a teenager.
• Copper (GetCopper) — The ultimate guide to investing for teens.
• TeenVestor — How To Invest Under Age 18.
• EarlyBird — Can you buy stocks if you're under 18?
• Investopedia — Stock Market for Teens.
• Fidelity — Fidelity Youth Account details.
• SEC / Investor.gov — Taking Stock in Teen Trading.

Final notes and next steps — further exploration

If you or a teen is asking "can under 18 buy stocks?" the practical path is: pick the appropriate account type, prioritize education and supervision, and start small using diversified investments or fractional shares. Custodial accounts, custodial Roth IRAs, 529 plans, and teen-focused brokerage products are the primary legal ways for minors to gain stock exposure today.

To explore platform options and wallet custody for crypto-aware families, consider Bitget’s educational materials and Bitget Wallet for secure custody and user-friendly onboarding. Learn more about custodial versus adult-owned accounts, and set up a plan that blends supervision with real-world learning.

Start by reviewing the account types above, pick one aligned with your goals, and open a low-cost account to begin hands-on learning together.