Teaching a teen to invest is one of the highest-return moves a family can make to build generational wealth. A few hundred dollars invested at 16 has decades to compound, and the act of placing a real trade teaches more than any classroom lesson on markets.
The hard part is picking the right account, because the choice shapes who controls the money, along with the implications of taxes and how it counts on FAFSA.
Below are the top investment accounts for teens in 2026, plus the other tax-advantaged options every family should know about.
1. Fidelity Youth Account — Best Teen-Owned Brokerage
Who it's for: Teens ages 13 to 17 whose parents already have, or are willing to open, a Fidelity Youth Account. The teen owns the account and places their own trades, with parents able to monitor every transaction.
Why we like it: No account minimums, no monthly fees, and $0 commissions on U.S. stocks and ETFs trades. Teens can also invest in Fidelity mutual funds, plus they get a free debit card and access to a teen-specific learning hub.
- Fees: $0 account fees, $0 commissions on online U.S. equity and ETF trades.
- Minimum: None to open.
- Investment options: U.S. stocks, ETFs, Fidelity mutual funds.
- Catch: A parent or guardian must already hold a Fidelity account, and access ends when the teen turns 18 (the account converts to a standard brokerage).
2. Schwab Teen Investor Account — Best Joint Brokerage
Who it's for: Families who want both the parent and teen on the account together. Schwab structures this as a joint brokerage for teens 13 to 17, so both co-own and can trade.
Why we like it: More flexible than monitor-only setups — parents can place trades, move money, and stay in step with the teen. Teens who finish the Quick Start to Stock Investing course within 45 days of opening get $50 in fractional shares split across the top five S&P 500 stocks.
- Fees: $0 account minimums, $0 commissions on listed equity trades.
- Minimum: None to open; $100 to activate the optional debit card.
- Investment options: Stocks, ETFs, mutual funds, fractional shares, U.S. Treasuries, and Schwab Investing Themes.
- Catch: Only available for teens 13 to 17, and the joint structure means assets count as student assets on the FAFSA.
3. Acorns Early — Best Custodial Investing App
Who it's for: Parents who want a hands-off, automated way to invest for younger kids and teens, with the funds transferring to the child at the age of majority.
Why we like it: Acorns Early is a UGMA/UTMA custodial account built into the Acorns app. Parents pick a diversified ETF portfolio, set recurring contributions, and family members can chip in with gift links. There's no contribution limit and no income limit.
- Fees: Bundled into the Acorns subscription (currently $3 to $12 per month, depending on plan).
- Minimum: $5 to start investing.
- Investment options: Diversified ETF portfolios across stocks and bonds.
- Catch: Custodial assets are counted as student assets for FAFSA purposes, which can reduce financial aid eligibility more than parent-owned accounts.
4. Greenlight — Best Investing + Banking Combo
Who it's for: Families who want one platform for spending, saving, chores, and investing — useful for younger teens earning their first money through allowance or jobs.
Why we like it: Greenlight pairs a teen debit card and chore-tracking app with Greenlight Invest+, which lets kids buy stocks and ETFs with parental approval on every trade. Parents stay in control while teens see real money move in real markets.
- Fees: Monthly subscription starting at $5.99, with investing included on higher tiers.
- Minimum: $1 to start investing in fractional shares.
- Investment options: Stocks and ETFs (parents must approve each trade).
- Catch: It's a subscription product, not a free brokerage, and the investing menu is narrower than a standard brokerage.
Other Tax-Advantaged Accounts To Know
Beyond a teen brokerage, four other accounts can play a role depending on the goal:
529 College Savings Plan
529 plans are state-sponsored plans where after-tax contributions grow tax-free and withdrawals for qualified education expenses are tax-free. You can use any state's plan, but residents often get a state tax deduction or credit for using their home state's.
Coverdell ESA
Coverdell are older education savings accounts that cap out at $2,000 per year per beneficiary, and contributions phase out at modified AGI between $95,000 and $110,000 for single filers and $190,000 to $220,000 for joint filers. Coverdell accounts can be used for K-12 expenses as well as college, and offer broader investment choices than most 529s.
Custodial Roth IRA
If your teen has earned income from a W-2 job or self-employment, a custodial Roth IRA may be the single best account to open. The 2026 IRA contribution limit is the lesser of the teen's earned income or $7,500. Contributions can be withdrawn anytime tax- and penalty-free, and decades of tax-free growth start the moment money goes in.
UGMA / UTMA Custodial Accounts
UGMA and UTMA accounts are standard custodial brokerage accounts with no contribution limits and no restrictions on use. The downside: assets transfer irrevocably to the child at the age of majority (18 to 25, depending on state) and are weighted heavily as student assets on the FAFSA.
How To Choose The Right Account
Start with the goal. For retirement and the teen has earned income, a custodial Roth IRA wins almost every time. For college, a 529 plan offers the strongest tax treatment for most families. For general investing and teaching real money skills, a teen-owned brokerage like the Fidelity Youth Account or Schwab Teen lets the teen build the muscle of placing trades and watching positions move.
One financial aid note worth flagging: any account in the teen's name (including custodial accounts and teen brokerages) counts as a student asset on the FAFSA, which is assessed at up to 20% versus roughly 5.64% for parent assets. If aid eligibility is tight, parent-owned 529 plans are treated as a parent asset on FAFSA.
How Are Teen Investment Accounts Taxed?
Investment income in a teen's name is subject to the Kiddie Tax. The first $1,350 of unearned income is tax-free, the next $1,350 is taxed at the child's rate, and anything above $2,700 is taxed at the parent's marginal rate. Roth IRAs and 529 plans sidestep this entirely when used as intended.
The Bottom Line
There's no single best investment account for every teen. The right answer depends on whether the goal is college, retirement, or general investing experience, and on whether the family wants the teen leading or learning alongside a parent. For most households, the simplest starting point is a teen brokerage account paired with a 529 plan — and a custodial Roth IRA the moment your teen brings home a paycheck.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.