|
How Old Do You Have To Be To Open a Thinkorswim Account?
Thinkorswim age limit requirement in 2025. How old do you have to be to open a brokerage account at Thinkorswim?
Thinkorswim for under 18 years old.
|
Thinkorswim Age Requirement
You must be at least 18 years old to open a Thinkorswim (Charles Schwab trading account) in the U.S. on your own
(without a custodian). If you are under 18, you can still open an account, but you will need help from a guardian. Keep reading for more information.
Age of Majority
The age of majority is when you are legally considered an adult by the government. This is usually 18 in most U.S. states, though some places have different ages for certain activities. To open a standard taxable brokerage account, you need to be 18.
Different brokerage accounts have different rules, which allows people under the age of majority to open investment accounts. Some U.S. brokerage firms may require a higher age to open accounts in other countries.
Free Thinkorswim Account
Open Thinkorswim Account
Custodial Accounts
There are two types of custodial accounts in the United States:
the Uniform Transfers to Minors Act (UTMA) account and the Uniform Gifts to Minors Act (UGMA) account. Both
are very similar and offer the same tax benefits. The UTMA account is newer and can hold real estate, while the UGMA can only hold securities. Most states use the UTMA, though some still use the UGMA.
To open a custodial account, you need two people: a custodian (the adult managing the account) and a minor under the age of majority. This is how minors can have brokerage accounts.
The custodian does not have to be the one adding money to the account. The grantor does that, and there can be a few grantors. The custodian can also be a grantor.
In all these cases, the money in the account belongs to the minor, whose name and birthday are on the account. When the minor reaches the age of majority, all the money in the account belongs to them, and the custodian no longer controls it.
If the grantors decide they want to take back the money they added before the minor becomes an adult, they can’t. Money put into a custodial account cannot be taken back.
For custodial accounts, the age of majority can be anywhere from 18 to 25, depending on the state. This is when the account is given to the minor.
Money in a custodial account can be used for any expense, not just education. Because of this, parents and grandparents might prefer other types of investment accounts.
Where to Open a Custodial Account
Charles Schwab is likely the most popular choice for a brokerage custodial account. There are no account fees,
commissions on stocks and ETFs are $0, and you get many benefits by investing with one of
the largest brokers in the world.
Open Thinkorswim Account
Open Thinkorswim Account
Coverdell Education Savings Plan
Start the Coverdell Education Savings Plan. Money in a Coverdell account can only be used for education expenses at any level. Like UTMA/UGMA accounts, there must be a beneficiary under the age of 18 to open the account.
Although parents and grandparents usually open Coverdell accounts, organizations can also add money to them. There are no income limits for institutions doing this, but individuals have income limits on Coverdell contributions.
529 Plans
Next is the 529 plan, the most popular investment account for minors today. This one is different from the Coverdell because the money can only be used for higher education. But like the other minor accounts in this article, the account must have a custodian and a minor beneficiary. Like the other two account types, a 529 plan has various tax advantages (and possible disadvantages) compared to regular brokerage accounts.
Opening a 529 plan might be a bit more difficult than the other two account types already mentioned, as many online brokerage firms don’t offer them.
Minor IRA
The last account we’re going to mention here is an IRA for teens. This is similar to any other Individual Retirement Account, except that the account has a custodian and a beneficiary under the age of 18 (like the custodial accounts mentioned already).
The one rule with this IRA is that the minor must have earned income to make contributions to the account. This is the same rule that regular IRAs have.
Updated on 1/2/2025.
|