Choose a financial institution: Research and select a bank, credit union or brokerage firm that offers custodial accounts. Some of the custodial account options include Vanguard, Acorns and Ally Bank. Be sure to consider factors like fees, account options and the range of investment opportunities available.
Select the type of custodial account: Decide whether you want to open a UTMA or UGMA account, based on the type of assets you plan to contribute and the flexibility you desire.
Gather the necessary information: You will need basic information about both the custodian and the minor, including Social Security numbers, birth dates and contact information. Some institutions may also require identification documents.
Complete the application: Fill out the account application provided by the financial institution, ensuring all information is accurate. Specify the type of custodial account and the initial deposit amount.
Fund the account: Once the account is open, you can transfer money or assets into the account. This can be done through a one-time deposit, recurring transfers or the transfer of existing assets into the account.
Manage the account: As the custodian, you will be responsible for account management until the minor reaches the age of majority. This includes making investment decisions, tracking contributions and ensuring the account is used for the minor’s benefit.