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My cousin’s son, all of 10 years old, is into stock investing, after his team won an investing game they played in school.

Now he wants to invest all his birthday and Xmas gifts in stocks for real. He will probably have $500 to start with. He has already picked Apple and Nio for his first investments.

My cousin wants to encourage his interest in investing and wants to know if she should open a brokerage account in her son’s name or in her own. Also which financial firms will open an account with a very low $500 minimum and allow investment in fractional shares of stock. I have heard of Robin Hood as it has been in the news a lot, but have no experience of it.

Thanks in advance for your recommendations.
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Did it occur to you or your nephew's parents to Google something like - brokerage accounts for minors? If not try it.

There are restrictions - at least according to the Google results I received.
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Robin Hood is both bad and good. Without sufficient funds to open at a higher tier broker and buy whole shares, it is an option. It is a very bare bones trading platform. Some accounts have been hacked and stolen. I don't know the extent that accounts were stolen or if Robin Hood compensated account holders for the loss.
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My cousin wants to encourage his interest in investing and wants to know if she should open a brokerage account in her son’s name or in her own.

If the money belongs to the child, then the account should be in the child's name. Your cousin will need to open a UTMA or UGMA (varies by state) in the child's name with herself as the trustee since the child is a minor. Pretty much any brokerage will have these accounts, but there may be a higher minimum than that $500, so he might have to save up a bit.

If the child is interested, perhaps the parents can match his funds which will teach him about matching funds such as in a 401k, give him incentive to save, and have his savings grow that much faster.

I have posted quite a lot over the years about how I did this with my kids from a very young age. We used to match anything they put into stock whether that came from their allowance, earnings, or gifts. My kids also had Roth IRAs once they started earning money with pet sitting and baby sitting and such when they were around 10 or 12.

Remember, though, that this money belongs to the child, and once the child reaches age of majority, they can use the money however they want, so it behooves the parent to ensure that the proper financial lessons are being taught along the way.
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How Good is Robinhood Support?
Offer phone support with a real live human during market hours, at least for Robinhood Gold users.
Commit to a personalized response by email to all users within 24 hours, or better yet same-day during market hours.

Robinhood Gold is $5 a month.

Those who saw their account being hacked couldn't reach a support person to prevent theft of the funds.
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If the money belongs to the child, then the account should be in the child's name. Your cousin will need to open a UTMA or UGMA (varies by state) in the child's name with herself as the trustee since the child is a minor. Pretty much any brokerage will have these accounts, but there may be a higher minimum than that $500, so he might have to save up a bit.

I opened a UGMA account for a baby friend of mine (she was a little less than a year old at the tima) at Ameritrade. My initial deposit into that account was betweem $800 and $900. The did not have any problem with that, and did not charge any fees, other than their usual commissions. Perhaps they took into account that I had a margin account, an IRA, and a Roth-IRA with them. It certainly was no secret.

It does not hurt to ask.
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My 37 year old daughter opened a Charles Schwab Roth with no money down.

I remember my parents set her up with a trust fund when I got divorced to become hers when 18.
The idea was she would use it for college.
Instead, she lives off the money for a year and bought '69 Chevy Camaro with a big rear end and it was stolen almost immediately because she didn't have enough money for comprehensive insurance.
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Remember, though, that this money belongs to the child, and once the child reaches age of majority, they can use the money however they want, so it behooves the parent to ensure that the proper financial lessons are being taught along the way.

As usual 2gifts has it covered. We don't know where anyone is and age of majority varies by state -
https://www.policygenius.com/retirement/age-of-majority-by-s...

It's been awhile since my kids aged out but it was kind of a PITA in some cases - like having the child have to set up a different account to move the money to, etc, and both the custodian and child be available. Scottrade was the easy one for my kids but it no longer exists. I might pick Schwab because of the great checking account for anyone who travels internationally. I like Fidelity's customer service and web site better.

And depending how much is in the UGMA account, there are tax implications and the parents are responsible.
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Thanks 2gifts and all others who took the time to share their expertise.

I posted for advice on Tax Strategies board so that I can pass on any tax related considerations of opening an account for a minor. The cash to be invested is not the nephew's wage income from doing chores and so cannot be in a Roth IRA. The money is gifts from family for birthdays, Xmas and rewards for good grades.

The other reason was to find a brokerage account which has no minimums, no trading or account fees and allows purchase of fractional shares, and allows minors to be the holder.

I found that Schwab, Fidelity and Interactive Brokers allow standard brokerage accounts for adults which satisfy all of the requirements. Schwab allows fractional shares for only S&P 500 companies, while Fidelity and IB allow virtually all US exchange-traded stocks, ADRs and even some Pink Sheet stocks. So Fidelity and IB would be better choices for my nephew's purpose.

I am still researching if they offer UTMA/UGMA accounts with all of those futures.

Thanks again
rnam
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Instead, she lives off the money for a year and bought '69 Chevy Camaro with a big rear end and it was stolen almost immediately because she didn't have enough money for comprehensive insurance.

I'm assuming that the lack of comprehensive insurance meant she didn't have coverage for theft and not the reason for the theft.

This is mostly a concern about large gifts to minor children. Also, if they take a detour into drug abuse access to large funds could result in them literally killing themselves. We have started a 529 plans for the grandkids. They seem stable but if something goes wrong the funds can be used for a different grandkid.

It is different for children who are investing their own funds and will be a lesson in capital gains taxes.
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This is mostly a concern about large gifts to minor children. Also, if they take a detour into drug abuse access to large funds could result in them literally killing themselves. We have started a 529 plans for the grandkids. They seem stable but if something goes wrong the funds can be used for a different grandkid.

Funny but she is drug free and alcohol free to the best of my knowledge. She is the designated driver when friends go out. I think me being busted for growing pot really soured her towards drugs.

Her and the ex ran up a $100k college loan in pursuit of a publishing degree.
She admits she ghosted me those years and it is not a requirement for me to pay off.
She is now working for Apple Computer making a lot of money as a project manager.
(I am going to offer to match her college loan payments.)
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