Custodial Account Comparison: Fidelity vs Schwab vs Vanguard
A $0 account minimum is not a $0 first investment. The fee, minimum and financial-aid differences between Fidelity, Schwab and Vanguard custodial (UTMA/UGMA) accounts, with the arithmetic.
Fidelity, Schwab and Vanguard will each open a custodial account for a child with $0 down. The differences start after that: Vanguard charges a $25 annual account service fee unless you choose e-delivery, and its own mutual funds need $1,000 to $3,000 (or more) to buy. This page puts the verified figures side by side and works out what the minimums mean in months of saving.
Every figure comes from the broker’s own page or the IRS, checked on 12 October 2026. This page explains mechanics. It does not recommend a broker, a fund or an investment, and it is not tax or investment advice.
What a custodial account is
A custodial account (UTMA or UGMA) holds assets in the child’s name with an adult managing them. Schwab’s page calls it an irrevocable gift that is turned over to the child at the age of majority, 18, 21 or up to 25 depending on the state (schwab.com/custodial-account, checked October 2026). It is a different structure from a 529 plan and from a teen-owned account; the full comparison is in UTMA vs UGMA vs 529, and the tax side is in the custodial account tax calculator.
Fees and minimums, side by side
| Fidelity | Schwab | Vanguard | |
|---|---|---|---|
| Minimum to open | $0 | $0 | $0 to open a brokerage account; fund minimums apply when you buy (below) |
| Online stock commissions | $0 | $0 for online listed stocks and ETFs | $0 for ETFs online; most clients pay a commission to trade Vanguard ETFs by phone |
| Account fee | None stated (“no account fees or minimums to invest”) | $0 to open and $0 to maintain | $25 per brokerage account per year; waived with e-delivery or $1 million or more in qualifying assets |
| Fund minimums | “Some Fidelity mutual funds have minimum investment requirements”; amounts not stated on the custodial page | Not stated on the custodial page | $1,000 to $100,000 depending on the fund (below) |
| Options | $0.65 per contract | Not checked | Not checked |
Sources: fidelity.com/open-account/custodial-account, schwab.com/custodial-account and investor.vanguard.com mutual fund fees, all checked October 2026. Vanguard’s page says the $25 fee and the fund minimums apply to “UGMA/UTMA accounts” along with individual and joint accounts. We did not find a separate Vanguard custodial-account landing page, so the standard brokerage terms are what is shown.
The number most roundups skip: the fund minimum
“No minimum” describes the account, not the purchase. Vanguard publishes these minimums for buying its own mutual funds:
| Fund type | Minimum | Months at $25/mo | Months at $50/mo | Months at $100/mo |
|---|---|---|---|---|
| Investor Shares: Target Retirement and STAR funds | $1,000 | 40 | 20 | 10 |
| Investor Shares: most actively managed funds; Admiral Shares: most index funds | $3,000 | 120 | 60 | 30 |
| Admiral Shares: most actively managed funds | $50,000 | 2,000 | 1,000 | 500 |
| Admiral Shares: certain sector index funds | $100,000 | 4,000 | 2,000 | 1,000 |
months = minimum ÷ monthly deposit, assuming deposits only
and no investment growth. A $25-a-month habit reaches a $1,000 minimum in
40 months, a little over 3 years. Vanguard’s ETFs carry no such floor on its
fee page, which is why ETFs are the usual route for a small starting balance
at any of the three. Fidelity’s page also warns that “certain
investments may require a minimum initial investment,” so the same
check applies there before you assume $5 buys a fund.
How the account affects financial aid
Schwab’s page states that “20% of the assets will be considered when applying for financial aid” because all assets are in the child’s name. Applied to a balance:
| Custodial balance | Counted at 20% |
|---|---|
| $5,000 | $1,000 |
| $10,000 | $2,000 |
| $25,000 | $5,000 |
The 20% is the rule for a student’s assets, so it is the same whichever broker holds the account. How it compares with a parent-owned 529 is worked out in the UTMA vs 529 breakdown.
Gifts into the account
The IRS annual gift-tax exclusion is $19,000 per recipient in 2026 (IRS gift tax FAQ, checked October 2026), and Fidelity’s page puts the married-couple figure at $38,000. The IRS says that if you give each of your children $19,000 in 2026, “the annual exclusion applies to each gift.” Amounts above it are a reporting question for a tax adviser.
Teen accounts are not custodial accounts
Both Fidelity and Schwab sell a separate product for ages 13 to 17 that works differently from a UTMA:
| Fidelity Youth Account | Schwab Teen Investor Account | |
|---|---|---|
| Who owns it | The teen: “the teen is the owner of the account and makes the investment decisions, not the parent or guardian” | Joint account between the teen and a parent or guardian |
| Ages | 13–17 | 13–17 |
| Minimums | No minimum balance to open | No minimum initial deposit |
| Fractional shares | From $1 | Available |
| Not permitted | Not checked | Margin, options, futures, forex, individual cryptocurrencies, leveraged and inverse ETFs |
Sources: fidelity.com/youth-account and schwab.com/teen-account, checked October 2026. Because ownership differs, the gift, control and financial-aid treatment of a teen account is not the UTMA treatment above; read the account agreement for how each one is classified before relying on the rules in this page for it.
Which structure fits which goal
- Giving money the child will own at the age of majority: a custodial account. It is irrevocable and you manage it until the transfer age.
- A teen learning to place trades with their own name on the account: the teen-owned or joint products above.
- Money earmarked for education: a different structure again, covered in the 529 comparison.
If the goal is a first lesson in saving and interest rather than investing, running a family bank needs none of the above.
What this page leaves out
Uninvested-cash yields, phone-trade fee schedules and fund expense ratios change often and were not confirmed on each broker’s primary page, so they are not printed. Check the broker’s current fee schedule before you open an account.
Frequently asked questions
Can I open a custodial account with no money?
Yes at Fidelity, Schwab and Vanguard: each lists $0 to open. At Vanguard, buying one of its own mutual funds still takes $1,000 to $3,000 for most funds, and $100,000 for certain sector index funds (investor.vanguard.com, checked October 2026). ETFs trade commission-free online at all three.
Does Vanguard charge a fee on a custodial account?
Vanguard’s page lists a $25 annual account service fee per brokerage account, and says the minimums on that page apply to UGMA/UTMA accounts. The fee is waived by signing up for e-delivery of statements and the annual privacy notice, or when qualifying assets total $1 million or more (checked October 2026).
Does a custodial account hurt financial aid eligibility?
Schwab’s page states that 20% of custodial assets are considered when applying for financial aid, so a $10,000 balance counts as $2,000. Fidelity’s page only says custodial assets are factored into aid eligibility without giving a percentage.
Is a teen investing account the same as a custodial account?
No. Fidelity’s Youth Account is owned by the teen, and Schwab’s Teen Investor Account is a joint account with a parent or guardian. Neither is a UTMA/UGMA, which is held in the child’s name with an adult custodian.
How much can I put into a custodial account?
The IRS annual gift-tax exclusion is $19,000 per recipient in 2026, and Fidelity’s page gives $38,000 for a married couple. Ask a tax adviser how larger gifts are reported; this page does not cover it.
Put it into practice
Bank of Dad gives each of your kids a savings account you control — set an interest rate, log deposits and withdrawals, and let them watch the balance grow. Free to use. Optional