If your child is too young to invest, you can open an account as a guardian. In such case, minor does not enter into any binding agreement with authorization. You can see it as an investment account opened in the name of the child. As a custodian, the person is required to select the type of account, depending on the investment intentions to manage college expenses or education fees. The facility is available in the form of a trust fund too, where you can select the age when the child can access it. So, considering the various alternatives, make the right selection from guardian account, custodial account, and IRA account. The investment guidance is vital to finalize such decision.
In case of custodial account established under the Uniform Gifts to Minors Act (UGMA), the custodian can open an account in the name of the child to introduce him/her to the world of investment. You can visit an investment advisor and discuss the investment choices with clear investment goals in mind. Know the benefits of every type of investment account to arrive at appropriate conclusion. Comprehend additional services that the institution provides. Get cleared the several thoughts that come to your mind, before finalizing the investment alternative. Thus, setting up a child investment account needs thorough understanding of the various investment alternatives available with you so that you can choose the best one amongst them.
Thus, initial research can prove to be helpful in fulfillment of your objectives of savings. To make it simple and real such account will teach the child the value of saving and investing. To certain extent, opening such an account offers some taxation relief too. This can be another reason why the person goes for such investments. Once the fund transfer is done, you act as a manager of the account; the funds belong to the child and can be utilized only for the benefits of the child. When he/she completes 18 or 21 years of age (differs in some cases), he/she gets the control of the account legally. Never forget that creation of custodial account gives birth to the child's irrevocable claim on the funds and your money is not yours anymore. So, think about other possibilities too.
Thus, research well and know the various alternatives available with you to finalize your investment alternative and open an account in the name of the child. Based on such information make the right choice, offering the benefits you are looking.