How old do you need to be to buy stocks?

How old do you need to be to buy stocks? In the U.S., you generally must be the age of majority (usually 18) to open a brokerage account in your own name; minors can still own stocks via custodial ...

2025-09-03 10:03:00

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How old do you need to be to buy stocks?

Buying your first shares is exciting — but many people ask: how old do you need to be to buy stocks? In the United States, you normally must be the age of majority (commonly 18) to open and control a standard brokerage account in your own name. That said, minors can and often do own stocks through custodial accounts (UGMA/UTMA), supervised teen investing products, custodial Roth IRAs if they have earned income, 529 college-savings plans, trusts, and other legal vehicles. This guide explains age rules, account options, tax and regulatory points, practical steps to get started, and international differences.

What you'll learn: whether a minor can legally own stocks, account types that let kids and teens invest, what changes when you hit the age of majority, tax basics (including kiddie tax), and practical next steps for teens and parents.

Overview of age and account access

When people ask "how old do you need to be to buy stocks?" they usually mean one of two things: either (A) at what minimum age can someone open and trade in a brokerage account in their own name, or (B) what legal paths let a minor own or benefit from equities before reaching that age. The distinction matters:

Legal ability to open a brokerage account in your own name typically requires reaching the age of majority (varies by U.S. state but commonly 18).
Separate ownership mechanisms — custodial accounts, trusts, education accounts, and supervised teen products — allow minors to hold securities before they reach majority.

Rules vary by country and by state for transfer ages and custodial details. This article focuses on the U.S. market and common options for minors, but includes notes on international variations.

Legal age to open a brokerage account (United States)

Age of majority and standard brokerage accounts

Most U.S. broker-dealers require an account holder to be the age of majority in their state (commonly 18) to open a standard, individual brokerage account without a parent or guardian listed as custodian or co-owner. Broker onboarding requires identity verification, tax identification (Social Security Number or taxpayer ID), and legal capacity to enter account agreements. That means, for the question "how old do you need to be to buy stocks?" the straightforward answer for an independent account is usually 18.

Broker requirements are practical legal safeguards: minors cannot usually sign binding brokerage contracts, margin agreements, or option agreements. As a result, underage investors rely on alternative account structures until they reach majority.

State variations for custodial transfer ages

Custodial accounts created under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA) are very common. They differ from plain individual accounts because a named adult (the custodian) manages assets for the minor's benefit. Ownership transfers to the child when they reach the age specified by state law — often 18 or 21, but some jurisdictions set the transfer age higher (e.g., 25 in a few states for UTMA). That transfer age determines when control passes to the former minor and affects planning decisions.

Because transfer ages vary, always check the custodial rules in the minor’s state of residence when answering "how old do you need to be to buy stocks?" via custodial arrangements.

Ways for minors to buy or hold stocks

Below are common legal paths that enable minors to own or benefit from stocks before they can open accounts independently.

Custodial brokerage accounts (UGMA/UTMA)

What they are: UGMA/UTMA accounts let an adult (the custodian) hold securities and cash for a minor. The assets legally belong to the child, not the custodian.
Who sets them up: Typically a parent, grandparent, or guardian opens the account in the minor’s name with themselves designated as custodian.
When control transfers: Assets transfer to the child when they reach the state-specified age of majority for UGMA/UTMA.
Why they’re used: Common for gifting stocks, ETFs, and other investments; flexible distribution for non-education purposes.
Tax and reporting: The child is the beneficial owner; some unearned income may be taxed under kiddie tax rules (see Tax and regulatory considerations).

Custodial accounts are one of the most common answers to "how old do you need to be to buy stocks?" because they allow ownership before majority while keeping compliance with contract law.

Custodial Roth IRA (and other retirement accounts for minors)

Eligibility: A minor with earned income (wages from a job, self-employment income reported on a tax return) can contribute to a Roth IRA up to the amount of their earned income for the year (subject to annual contribution limits).
Custodial aspect: If the minor is under the age of majority, a custodian will typically manage the IRA until the minor reaches adulthood.
Purpose: Long-term retirement savings with tax-advantaged growth; Roth contributions grow tax-free and qualified withdrawals are tax-free in retirement.

So, "how old do you need to be to buy stocks?" for retirement accounts — you can own IRA assets as soon as you have eligible earned income and a custodian if required, even if you’re under 18.

529 plans and Coverdell ESAs

529 plans: State-sponsored college-savings plans that invest in mutual funds or ETFs to grow tax-advantaged for qualified education expenses. The account owner (often a parent) controls distributions; the beneficiary is typically a minor.
Coverdell Education Savings Accounts (ESAs): Smaller contribution limits than many 529s but allow a wider range of investment choices and educational uses.

Both are common when the investment goal is education rather than direct wealth transfer. They provide investing exposure for minors but are controlled by the account owner, answering part of the question "how old do you need to be to buy stocks?" since the minor benefits though they may not personally sign account agreements.

Teen / youth investing accounts offered by brokerages and fintechs

In recent years, several brokerages and fintech platforms have launched supervised or teen-friendly investing products that let adolescents research, request, or execute trades under parental oversight. Examples of features commonly described in public sources:

Teen account connected to a parent or guardian account.
Two-sided roles: teen gets a learning interface and can suggest trades; parent approves or controls trading privileges.
Educational tools: articles, lessons, and risk controls built into the product.

Providers market these as answers to parents asking "how old do you need to be to buy stocks?" while combining education and guardrails. When comparing teen products, review who holds legal ownership, whether custody is in the parent name, and what controls are available. Bitget also offers user safety tools and educational resources for younger users; consider Bitget Wallet for safe custody options and Bitget's institutional protections when selecting a platform.

Trusts and other legal vehicles

Families may use revocable or irrevocable trusts to hold investments for a child. Trusts are more flexible and can specify when and how a beneficiary receives assets (e.g., distribution at ages 21, 25, 30, or by stages). Trusts involve legal costs and complex tax considerations, so they are typically used for larger estates or where precise control is desired.

Trusts are a tailored answer to "how old do you need to be to buy stocks?" since the trust — not the minor — owns the assets until conditions for distribution are met.

How to buy stocks once you reach the legal age

When the question shifts to "how old do you need to be to buy stocks on your own?" and you reach majority, the steps to open an independent brokerage account are straightforward.

Documentation and onboarding

Typical requirements for opening a standard brokerage account after reaching legal age include:

Government-issued photo ID (driver’s license, passport, state ID).
Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
Proof of address (utility bill, bank statement) for identity verification.
Funding source (linked bank account) to deposit funds.
Completion of account agreements, risk disclosures, and tax forms (e.g., W-9 for U.S. persons).

Broker-specific identity checks and anti-money-laundering procedures may add steps. If you plan to use margin, trade options, or use advanced features, additional agreements and suitability checks typically apply and may not be appropriate for new investors.

Account types to consider (taxable, Roth/Traditional IRA, 529, custodial)

When deciding what to open once you hit the legal age, consider your goals:

Taxable brokerage account: Flexible use, taxable on capital gains and dividends, no contribution limits, suitable for general investing.
Roth IRA / Traditional IRA: Retirement-focused, tax advantages depend on account type; Roth requires earned income for contributions.
529: If funds are for education, 529 offers tax-advantaged qualified withdrawals.
Custodial account: If assets were already held in custody, they may transfer at the state-specified age.

Choosing the right account depends on time horizon, tax situation, and intended use for the money.

Tax and regulatory considerations

Understanding taxes and regulations is essential whether you’re asking "how old do you need to be to buy stocks?" or planning ownership structures.

"Kiddie tax" and reporting for custodial accounts

The so-called kiddie tax affects certain unearned income of children. Unearned income (interest, dividends, capital gains) above specified thresholds may be taxed at the parents’ marginal rate under kiddie tax rules, and custodial accounts require proper tax reporting. Reporting thresholds and calculation methods are set by the IRS and can change, so check the current IRS guidance or consult a tax professional for precise numbers.

From a practical standpoint, understand that:

Small amounts of investment income are often tax-free or taxed at the child’s rate.
Larger unearned income may be taxed at the parent’s rate.
Capital gains realized in custodial accounts are reported on the child’s return (or the parent’s return in some cases) depending on income levels and IRS rules.

Taxes on capital gains, dividends, and Roth IRA rules

Taxable accounts: Capital gains taxes apply on net gains when you sell assets; holding periods determine short-term vs long-term rates. Dividends may be qualified (eligible for lower rates) or nonqualified.
Roth IRA: Contributions are made with after-tax dollars; qualified withdrawals of earnings are tax-free in retirement. Contributions to Roth IRAs are limited by earned income in the year and by annual contribution caps.

If a minor has earned income and contributes to a custodial Roth IRA, the contribution cannot exceed the minor’s earned income for the tax year.

Investor protection and SEC guidance

The SEC and Investor.gov provide educational resources for young and new investors, including warnings about fraud, pump-and-dump schemes, and high-risk products. For youth investors, key points include:

Beware of unsolicited investment tips on social media.
Understand the risks of speculative trading and leverage.
Use accredited educational resources when learning to invest.

Investor.gov and the SEC also emphasize that account agreements, brokerage terms, and applicable protections vary between providers.

Risks, education and best practices

Investing early is a powerful advantage, but it must be balanced with education and risk management.

Investment risk and diversification

Start with a long-term time horizon: equities are volatile short term but historically have rewarded patient investors.
Diversify holdings: individual stocks are riskier than diversified funds or ETFs.
Avoid concentration in a single company or theme (e.g., meme stocks) until you understand the risks.

Parental supervision and teaching moments

For parents, helping a child navigate investing can teach financial responsibility:

Set clear goals (education, long-term growth, learning).
Use supervised accounts to teach order entry, research, and performance evaluation.
Consider simulated trading or small, controlled allocations for experimentation.

Bitget’s educational materials and Bitget Wallet can complement parental guidance by providing secure custody and learning resources.

Common pitfalls (meme stocks, leverage, options)

Meme-stock rallies and social-media driven trades can be highly volatile and may cause large losses.
Margin and options amplify risk and are typically restricted by brokers for new accounts or minors.
Many platforms restrict underage users from margin or derivatives. Even after reaching the legal age, understand product risks before trading.

Practical steps to get started (for teens and parents)

A concise, actionable checklist for minors and parents:

Clarify goals: education, long-term savings, retirement, or discretionary investing.
Choose the right account type: custodial account, custodial Roth IRA, 529, trust, or supervised teen product.
Compare providers: fees, educational features, custody and security, trade controls, and transfer rules at majority.
Open the appropriate account: gather ID, SSN, proof of address (parent or custodian likely needed).
Fund the account legally: gifts, earned income (for Roth IRA), contributions from parents.
Build a simple, diversified portfolio appropriate to the child’s timeline and risk profile.
Teach record-keeping: transaction records, tax documents, and cost-basis tracking.
Review periodically: adjust goals, teach evaluation methods, and transition control when the child reaches majority.

International variations

Outside the U.S., each country has its own rules and products:

United Kingdom: Junior ISAs and Child Trust Funds let children hold stocks and funds with tax advantages and adult control.
Other jurisdictions: Different age of majority, custody rules, and tax implications apply.

If you live outside the U.S., check local laws and broker availability. When choosing custody or trading platforms internationally, consider regulated providers and safety features — for Web3 assets, consider Bitget Wallet and Bitget’s security offerings.

Frequently asked questions (FAQ)

Q: Can minors own stocks?

A: Yes. Minors can own stocks via custodial accounts (UGMA/UTMA), trusts, 529 plans, and supervised teen investment products. Minors with earned income can also contribute to custodial Roth IRAs.

Q: When does control transfer to the child in a custodial account?

A: Control transfers when the child reaches the state-specified age for UGMA/UTMA ownership — commonly 18 or 21, but check your state’s rule.

Q: Can a teen trade alone?

A: Generally no. Most brokerages require the account holder to be the age of majority to trade independently. Some fintech teen accounts allow supervised trading but legal ownership and control typically rest with the adult custodian.

Q: Are custodial accounts taxable?

A: Yes. Earnings in custodial accounts may generate taxable events (dividends, interest, capital gains). The kiddie tax rules may tax some unearned income at the parents’ rate.

Q: Can a minor have a retirement account?

A: Yes. If a minor has eligible earned income, they can contribute to a Roth IRA up to the amount of their earned income for the year. Custodial IRAs are managed until majority.

Recent related news (context for investors)

As of Dec. 15, 2025, according to Motley Fool’s podcast recording that day, SpaceX and related market discussions illustrated the scale and complexity of major public offerings. The podcast noted Starlink had reached over eight million subscribers and discussed revenue estimates for SpaceX (reportedly rising from roughly $1.4 billion in 2020 to estimates near $15.5 billion in later years). Commentary emphasized that large IPOs and complex corporate structures underscore the importance of investor education and long-term discipline — useful reminders for anyone asking "how old do you need to be to buy stocks?" before entering markets. (Source: Motley Fool podcast recorded Dec. 15, 2025.)

Note: the numbers referenced above were discussed on the Dec. 15, 2025 episode and should be verified with company filings and primary sources when assessing investment facts.

Sources and further reading

Sources used to compile this guide include educational and industry references addressing age rules, custodial accounts, teen investing products, and tax/regulatory guidance: Investopedia, Greenlight, Copper, StocksToTrade, Bankrate, The Motley Fool (podcast noted above), Benzinga, Investor.gov / SEC, and Fidelity. These sources discuss practical account mechanics, custodial transfer ages, teen investing product features, and regulatory considerations. For platform-specific custody and trading features, consider Bitget and Bitget Wallet for custody and educational resources.

Final notes and next steps

If you’re wondering "how old do you need to be to buy stocks?" remember that while independent accounts typically require the age of majority (often 18), there are many legal and practical ways for minors to own stocks and begin learning to invest responsibly. Parents and guardians can use custodial accounts, supervised teen products, custodial Roth IRAs (when the child has earned income), and education-focused accounts like 529 plans to jumpstart investing and teach financial skills.

Ready to take the next step? For U.S.-based investors, compare custodial and teen account offerings, review state transfer ages for UGMA/UTMA, keep tax implications in mind, and prioritize education and diversification. When choosing platforms and wallets for custody or Web3 interaction, consider Bitget Wallet for secure custody and Bitget’s exchange services for trading needs.

Explore more educational guides and step-by-step tutorials to turn knowledge into safe, informed action — and keep learning as regulations and products evolve.

This article is informational only and does not constitute investment advice. Always consult official regulatory guidance and a tax or legal professional for personalized recommendations.