How Old Do You Have to Be to Buy Stock?

It’s never too late or too early to start investing. But how old do you have to be to buy stock? While brokerage firms have age restrictions on opening a standard account, minors can still join the exciting stock market investment world.

In this blog post, we’ll discuss the available options and offer some tips on how to teach your kids about investing. Keep reading to learn more!

Can Minors Buy Stocks?

In the US, you must be at least 18 years old to buy stocks. This is because you need to be legally considered an adult to enter into contracts. Also, traders should be old enough to understand their financial responsibilities and the risk involved in stock investments.

Some states even have an over-18-years minimum requirement for investing. Alabama, Delaware, and Nebraska have a mandatory minimum age of 19 for letting someone invest in stocks. While in Mississippi, you must be 19 or older.

On the other hand, there are some countries where the age requirement to buy stocks is younger than 18. In Canada, for example, you only need to be 16 years old. So if you’re interested in buying stocks but don’t meet the age requirement in your country, it might be worth checking out how the process works in other countries.

Yet remember that with some handholding, minors are allowed to buy stocks even before reaching legal age. Let’s see how!

How to Buy Stocks if You Are a Minor

There are a few ways for minors to buy stocks. The first is through a custodial account. This is an account opened in a child’s name but administered by a parent or guardian. The adult has control over how much money gets invested until the minor reaches legal age.

Depending on the state of your domicile and your investment interests, you can open a Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) account. A UTMA/UGMA account is a type of custodial account that allows parents to invest in assets on behalf of their child. The holdings in a UTMA/UGMA account are considered the child’s property and can be used for any purpose once the child reaches the age of majority.

The difference between UTMA and UGMA is that the former can hold virtually any kind of asset, while the latter is limited to financial assets of cash and securities. Also, all US states allow UGMA accounts, but UTMA is not an option in South Carolina.

Another option is opening a state-sponsored investment account under the 529 savings plan. Similar to custodial accounts, these are opened and operated by a parent or a guardian, who can buy and sell investment products. The account beneficiary will have access to the account holdings once reaching 18, but those funds can only be used for qualified expenses for education. Also, the investment options available to a 529 savings plan are significantly more limited than a standard brokerage account.

What to Consider When Opening an Investment Account for Minors?

When it comes to investing for kids, there are a few key things parents should keep in mind. Below we will outline some of the most important factors to consider when opening an investment account for minors.

Age restrictions

In order to invest in stocks and other securities, you must be at least 18 years old. However, a few options are available for investing in minors, including custodial accounts and UTMA/UGMA accounts.

Investment options

When investing for kids, it is important to choose investments that are appropriate for their age and risk tolerance. Younger children may be more suited for investing in less risky assets such as bonds or cash equivalents, while older children may be able to handle investing in stocks and other securities.

Tax implications

Parents should also be aware of the tax implications of investing for kids. In most cases, any income or gains generated from investments in a minor’s account will be taxed at the child’s rate, which is typically lower than the parents’ rate.

How to Teach Your Kids About Investing

Becoming financially literate has no age restrictions. Talk to your child about the stock market. Explain what it is and how it works. Use examples of stocks, companies, and investors that they know. For instance, if they love Disney movies or shows on Nickelodeon™, you can use them as examples in your lessons. If they are interested in sports or music, then discuss investing in those areas.

Talk about the importance of saving. Explain that it is better to save money now and invest later than spend all your money on things you don’t need at the moment. Also, talk about how much more worth their savings will be in the future if they start investing early.

Encourage your child to ask questions. The more they know, the better equipped they will be to make informed decisions about their own finances. And the best way to increase their knowledge is by motivating them to explore the investment market.

You can also use online resources to help educate your kids about investing. The Securities and Exchange Commission (SEC) offers a website for children called “Edgar Online for Kids.” This site is designed to teach kids about financial topics such as saving, investing, and the stock market. There is also a kids’ page on the Financial Industry Regulatory Authority (FINRA) website with fun games and activities.

Key Takeaways

You now know the answer to the question – “How old do you have to be to buy stock?” To invest in stocks and other securities, you must be at least 18 years old. But you can work around the general age restriction, opening a custodial account, UTMA/UGMA, or a 529 investing plan and using some guidance from your parents or guardians.

If you are an adult looking to introduce a child into the financial world, make sure to choose investments that are appropriate for their age and risk tolerance. Also, consider all the available online resources that can help educate your kids about investing. It’s never too early or too late to start teaching kids about investing and the stock market. By using games, activities, and real-world examples, you can help prepare your child for a lifetime of financial success.


After I got my degree in translation and interpreting, I started working in a typical office. To get away from my nine-to-five job, I ventured into freelance writing. One thing led to another, and I ended up creating content for SpendMeNot. I have been involved with this site ever since its launch — first as a writer and now as a manager.

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