Stocks for children
We have no children and are thinking about buying stocks for our grand nieces and nephews for birthdays and holidays.
A friend set up a Sharebuilder account for her grandchildren which is now Capital One and at RobinHood. You mentioned stock builder in one of your question/answers.
What would you advise? And, what namebon the account their parents or us.
Thank you!
We would invest about $500 per year.
Thanks so much for your help.
Terry Says
Well, it’s wonderful to introduce children to the stock market — BUT, money held in custodial accounts for the child will weigh very heavily against the family in the financial aid formulas, assuming they will need to apply for financial aid one day when the children go to college!
In that case, I’d suggest opening a 529 college savings account at Vanguard or Fidelity and making regular annual contributions. The money in the account will grow tax free for college expenses. The parents should be named custodian of a 529 account. And be sure to ask if they have already opened one, so you can just add contributions.
But if you want to buy just a few shares for educationa purposes, Sharebuilder is fine, or I like Stockpile.com.
