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Bottom line: The Fidelity Youth Account is best for minors (between the ages of 13 and 17) who want to invest on their own. While parents/guardians don’t oversee the accounts, teenagers can only use them if their parent/guardian has an existing account with Fidelity.
In 2021, online brokerage Fidelity became a pioneer in the investment space by launching the Fidelity Youth Account, an investment account that gives teenagers the power to make their own trading decisions.
Such accounts are uncommon amongst online brokerages and investment apps, since most mainly provide parent or guardian-managed vehicles like UGMA/UTMA custodial accounts, 529 college savings plans, and IRAs for minors. The Fidelity Youth Account, however, allows for both DIY trading and spending and savings perks.
You can also use the account with Fidelity’s iOS and Android mobile apps.
Min. Investment
$0
Min. Investment
$0 for all custodial accounts
Fees
0%
Fees
0% for custodial account, IRA for Minors account, 529 plan, and Education savings account
Investment choices
Stocks, ETFs, Fidelity mutual funds
Investment choices
Stocks, ETFs, options, futures, mutual funds, money market funds, CDs, and bonds
Fidelity Youth Account and Charles Schwab offer many of the same products: self-directed brokerage accounts, automated portfolios (or robo-advisors) and advisor-managed accounts, IRAs, and much more. But when it comes to minor-related accounts, Fidelity is the better choice for teenagers who want to take things into their own hands.
Both brokerages offer a variety of custodial accounts that parents or guardians must themselves set up and manage, but Schwab doesn’t currently offer the Fidelity Youth Account equivalent.
Min. Investment
$0
Min. Investment
$0 for custodial account, IRA for Minors account, and education savings account
Fees
0%
Fees
0% for custodial account, IRA for Minors account, and education savings account
Investment choices
Stocks, ETFs, Fidelity mutual funds
Investment choices
Stocks, ETFs, bonds, options, mutual funds, futures, and CDs
As with Fidelity Youth Account and Schwab, the key difference between Fidelity and E*TRADE is that Fidelity offers a youth account that allows teenagers to make all of the investment decisions in the account. E*TRADE, however, offers several accounts designed to build wealth for minors, but parents/guardians must oversee these accounts.
The Fidelity Youth Account is free to set up and use, and it comes with a debit card. But while the account is teen-owned, the parent or guardian must have an existing Fidelity brokerage or cash management account in order for the minor to invest.
As for investment types, teens can purchase both full and fractional shares of stocks, ETFs, and Fidelity mutual funds. Investments in cryptocurrencies, penny stocks, international stocks, foreign currencies, and IPOs are currently prohibited.
And ownership of this account doesn’t limit parents/guardians from utilizing other Fidelity accounts on behalf of their child. Even if you’re currently investing with the youth account, your parent can still open a UGMA/UTMA account, Roth IRA for Kids account, or 529 plan on your behalf.
Once you turn 18, you’ll have to transition the account to Fidelity’s standard brokerage account. According to Fidelity, the debit card issued will still be valid until it expires, at which point it will issue a new debit card.
The Better Business Bureau gives Fidelity Investments an A+ rating; BBB ratings range from A+ to F, so this is the highest rating a company can receive.
As for its methodology, the bureau’s ratings mainly stem from its opinion of how well a company interacts with its customers, but the BBB also takes into account several other factors when evaluating businesses. These include type of business, time in business, advertising issues, licensing and government actions, and more.
Keep in mind, however, that the bureau’s ratings don’t guarantee a company’s reliability or performance, so it’s equally important to do your own due diligence before opening an account.
Fidelity paid $28.5 million in 2020 to settle a 2018 lawsuit that accused the company of failing to adhere to its fiduciary duty by offering 401(k) plan investments that presented conflicts of interest. The company has closed more than 350 complaints in the last 12 months.
The Fidelity Youth Account is a brokerage account for teenagers between the ages of 13 and 17. However, in addition to investing, the account also allows for spending and saving all under one umbrella.
Yes. Fidelity offers a vast range of accounts that may be beneficial for those under the age of 18. These include its UGMA/UTMA custodial account, Roth IRA for Kids, and 529 plans. A parent or guardian must open and manage each of those accounts, but minors can set up and invest on their own using the youth account.
Yes. The only account that Fidelity currently offers that allows teenagers to do DIY investing is the Fidelity Youth Account.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
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