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Best custodial brokerage accounts for non-US residents

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Author
Pedro Braz
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Fact checked by
Franklin Silva
Updated
May 29, 2024

In the US or the UK, it is typical to open an investment account for your kids. These are called custodial accounts.

It allows parents to introduce their kids to investing at a very young age and investing a good amount that could grow over time and be used once they are older.

Many US brokers offer these kinds of accounts for minors, including Interactive Brokers, Charles Schwab, Vanguard, and many more.

However, it is very hard to find a broker to let you open an account under your child’s name if you live outside the US, including in many European countries.

In this posts, we’ll guide you through the alternatives available for non-US residents that want to open a brokerage account for their kids.

What is a custodial brokerage account?

A custodial brokerage account is a financial account managed by an adult (the custodian) for a minor (the beneficiary). These accounts are designed to hold and invest assets until the minor reaches the age of majority, at which point control of the account is transferred to them.

Most European and non-US brokers do not offer custodial brokerage accounts.

In Europe, this type of account is almost non-existent, partially due to strict regulatory requirements.

Brokers that support custodial accounts outside the USA

Unfortunately, if you’re a non-US citizen, almost no international broker offers the possibility to open a custodial account for your child.

Most brokers, such as IBKR, Saxo Bank, DEGIRO, eToro, Trading 212, or Trade Republic, do not offer custodial accounts:

  • Interactive Brokers offers it to US residents only;
  • DEGIRO used to offer this, but not anymore;
  • Trading 212 does not offer it;
  • Saxo Bank does not offer it;
  • Trade Republic does not offer it;
  • Trading 212 does not offer it;
  • Scalable Capital does not offer it.

From our research, only small startups, such as Finax, and InbestMe, two robo-advisors, are offering this type of account.

As such, you are left with very few choices if you live outside of the USA. Below, we explore alternatives that you can follow.

Check your country’s national savings offerings

Generally, each country has different incentives for saving/investing, and local governments tend to create tax-efficient investment structures that cater to several needs, including financial products dedicated to your children. Here are some examples:

  • Junior ISAs (UK): In the UK, a Junior Individual Savings Account (ISA) is a tax-free savings account for children. Parents or guardians can open a Junior ISA and manage it until the child turns 18.
  • PPR (Portugal): Although primarily a retirement savings plan, PPR can also be used to save for children’s future needs, such as education. They offer tax benefits and can be a flexible long-term savings vehicle.
  • Livret A Enfant (France): A savings account for children that offers tax-free interest. It’s managed by parents or guardians until the child reaches the age of majority. It is a popular and secure way to save money for a child’s future.
  • Junior Depot (Germany): These are investment accounts specifically designed for minors. They allow parents to invest in stocks, bonds, and funds on behalf of their children, with the goal of long-term savings for education or other future expenses.
  • Conto Deposito Vincolato per Minori (Italy): Fixed-term deposit accounts for children with higher interest rates than regular savings accounts, designed to encourage long-term savings for future expenses like education.
  • JongWijs Account (Netherlands): A savings account for children that includes educational resources to teach kids about money management. Managed by parents until the child turns 18.

If you can’t or simply prefer not to use the structures mentioned above, there are some options for you to explore.

Alternative 1: open a secondary account at Interactive Brokers

Interactive Brokers is one of the biggest and most reputable online brokers available internationally.

If you already use Interactive Brokers to trade, then creating a secondary account for your kid could be a great option.

IBKR allows you to open as many additional accounts as you want. You are the owner, but once they turn 18, the shares can be transferred to their accounts.

Interactive Brokers secondary account

It’s pretty straightforward to create an additional account and, that way, you can have separate accounts for you and your kids, all under the same login.

Here is some important information:

  • The investments will be under your ownership, not your kids.
  • Once they turn 18 years old, you can open them a brokerage account and transfer the shares to their accounts.

Award Winner

Interactive Brokers logo
IBKR at a glance
Offers interest on uninvested cash
No monthly account fees
Reputable company
See broker summary
Visit BrokerRead review
Broker summary
Interest offeredEUR: 3.195%; USD: 4.83%; GBP: 4.707% (as of June 2024)
ETF trading feesTiered plan: 0.05% of trade value
Min deposit€/$/£0
Conversion feeUp to 0.0020%
Products offeredStocks, ETFs, options, futures, Forex, commodities, bonds and funds.
RegulatorsFINRA, SIPC, SEC, CFTC, IIROC, FCA, CBI, AFSL, SFC, SEBI, MAS and MNB.
Visit BrokerRead review

Alternative 2: create a pie on Trading 212

Trading 212 is another well-know international broker that is mostly targeted for beginner investors, as their trading app is very slick, modern and easy-to-use.

Trading 212 offers a flexible platform where you can create investment “pies” tailored to your long-term goals. Here’s a guide on how you can set up and manage such an investment strategy for your child.

Step 1: Open a Trading 212 Account

Step 2: Create a Pie

  1. Access the Pie Feature: Navigate to the ‘Pie’ section within the Trading 212 app.
  2. Customize Your Pie (Or choose a “ready-made pie”): You can create a pie consisting of up to 100 different stocks or ETFs.
  3. Adjust Allocation: Allocate the desired percentage to each stock within the pie. For instance, you might choose to allocate 20% to each of the 5 stocks.

Step 3: Fund Your Pie

  1. Monthly Contributions: Set up a recurring deposit plan to fund the pie monthly.
  2. Buy and Hold Strategy: The pie will automatically invest your contributions according to the allocations you’ve set, following a buy-and-hold strategy.
Trading 212 - create a new Pie
Pie name: kid's account
Build your Pie

Transferring Shares to Your Child at Age 18

Currently, Trading 212 does not offer a direct custodial account feature similar to a custodial brokerage account. However, you can manage the investments in your account and then transfer the value to your child’s new account once they reach the age of majority. Here’s how:

  1. Opening a New Account: When your child turns 18, they can open their own Trading 212 account.
  2. Transfer of Assets: While you can’t directly transfer the shares without selling them, you can potentially gift the equivalent value in cash. You would need to sell the shares in your account and then transfer the proceeds to your child’s new account, where they can repurchase the same shares.

Award Winner

Trading 212 logo
Trading 212 at a glance
Offers interest on uninvested cash
No monthly account fees
Easy-to-use app
See broker summary
Visit BrokerRead review
Broker summary
Interest offeredEUR: 4.20%; USD: 5.10%; GBP: 5.20%
ETF trading fees€/£0
Min deposit€/£10
Conversion fee0.15%
Products offeredStocks, ETFs, Forex, CFDs on stocks, crypto, indices and ETFs. Fractional shares, automatic investment system.
RegulatorsFCA, CySEC, ASIC and FSC.
Visit BrokerRead review

Investing involves risk of loss.

Conclusion

As you can see, there are very few options for non-US residents to start investing for their kids. We have tried to highlight some alternatives so that you can start investing for your kids future.

If you have any doubt, feedback, or know of any broker that offers custodial accounts for international investors, please contact us and let us know. We’ll be happy to get in touch with you!

FAQs

Does Interactive Brokers offer a custodial account?

Yes, IBKR does offer a custodial account. However, it is only available in the US for the time being.

Does eToro offer a custodial account?

No, eToro does not offer a custodial account. You cannot open an eToro account if you’re under 18.

Does Saxo Bank offer a custodial account?

No, Saxo Bank does not offer a custodial account. You cannot open an account for your children.

Does DEGIRO offer a child minor account?

No, DEGIRO does not offer them. DEGIRO used to have accounts for children, but stopped doing so in 2018, due to increasing regulatory requirements.

Does Trading 212 offer a child minor account?

No, Trading 212 does not offer custodial accounts.

Does Scalable Capital offer a child minor account?

No, Scalable Capital does not offer a custodial account.

Does XTB offer a custodial account?

No, XTB does not offer an account for kids.

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About the author
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Pedro Braz
Co-Founder & Growth Manager

Pedro is passionate about finance, marketing, and technology. He is a growth manager at several online projects and a former digital marketer for a fintech company.

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