Custodial Account

What is a 'Custodial Account'

A custodial account is an account created at a bank, brokerage firm or mutual fund company that is managed by an adult for a minor that is under the age of 18 to 21 (depending on state legislation).

2. A retirement account managed for eligible employees by a custodian.

BREAKING DOWN 'Custodial Account'

1. In a custodial account, approval from the custodian is required in order for a minor to transact securities. The custodian of these types of accounts is usually a parent or guardian of the minor.

2. The investments managed within a custodial account are limited to mutual funds and other similar products offered by regulated investment companies.

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RELATED FAQS
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    Read about the difference between a normal custodian bank and a mutual fund custodian, why mutual funds use custodians and ... Read Answer >>
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    Examine why smaller custodian banks struggle to compete with larger custodian banks because of economies of scale and existing ... Read Answer >>
  3. Are custodians barred from engaging in commercial banking?

    Learn how bank custodians are allowed to engage in commercial banking as well as other investment activities according to ... Read Answer >>
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    The board feels that we can handle our investments ourselves, but I am a) unsure how to go about this, b) whether or not ... Read Answer >>
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