What Is The Custody Account & Who Administrate This Account?

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Custody account is really any type of financial account that one person opens and maintains for another person. In most cases, it’s a brokerage account or savings account that an adult controls for a child under the age of 18.

  • You should think twice before going custody account, make sure it is right for you.

One of the biggest factors in such a decision is examining the impact of these accounts on financial aid. Assets in a custodial account will count as a child’s assets when that child applies for financial aid. If you have a lot of money in the account, your child could miss out on thousands in potential aid.

  • Once the child is of 18 years old, he or she assumes ownership and can control the account how he or she wishes.

A Custody account is a great way to save up for your child’s future. That’s the case whether you’re stockpiling cash for higher education or otherwise. You’ll know that while your child grows, he or she will have some money maturing as well. The tax benefits that come with custodial accounts can be an extra bonus as well.

Another factor to consider is the minor for whom you’re opening the account. With UTMA and UGMA accounts, the minor is in full control of the account and its assets once he or she is of age. You may be worried your child still might not spend the money in the most responsible fashion at 18 or 21. In that case, this might not be the account for you.

  1. When it comes to investing, it’s extremely important to have a diversified portfolio so you’re protected from risk. If you’re using a custodial account to introduce your child to investing, make sure to stress the importance of diversifying.
  2. You might also do better really boosting your savings elsewhere, especially with an online bank. Online banks don’t have to worry about maintaining physical branches. That allows these banks to pass those savings onto their customers in the form of high-yield savings accounts and CD rates.
  3. If you already have some money to spare, you could save even more by finding a financial advisor. A financial advisor can take a comprehensive look at your finances and determine where you can cut expenses and save more.

  • You just need to find the right advisor, so that you can use this as a smart asset when ever required.

You can answer any question about your financial goals and situation; we are always there to assist you. Contact usd if you are interested in Custody account
Location: United States

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