Where can a teen buy stock online?

Question

First of all, can teens buy stock online? And if so, what websites are good for stock-buying?

Answer 1

Unless you're at least 18, you will need to get an account with one of your parents as "custodian". Rules vary somewhat in different states, but almost all states have something called "Uniform Transfers to Minors Act" or in some cases "Uniform Gifts to Minors Act" which are abbreviated UTMA and UGMA, respectively. With this type of account, the custodian (your parent) legally controls the account, but it's for the minor's benefit.

What that means is that the parent has to sign all legal documents and is responsible for making decisions about how to invest and/or spend the money in the account, BUT they are legally required to use the money only for the benefit of the child. So, for example, they can use it to pay for you to go to summer camp or take piano lessons, but they can't use it to buy things for themselves.

When the minor reaches a certain age (usually 18 or 21), the account automatically transfers to the child who becomes full owner of the account.

Any discount brokerage (TDAmeritrade, E*Trade, Scottrade, etc.) should be able to set up an account like this.

If you happen to be fortunate and have a lot of money, you might want to have your parents check with an attorney about the exact rules because if they put in more than $24,000 (or $12,000 if you have only one parent) in any single calendar year, they might have to file a gift tax return.

Please be careful about investing in stocks. I believe they're the best thing to invest in for long-term investments, but you can lose a lot of money if you don't choose the stocks wisely. Personally, unless you have more than $25,000, I think it's better to invest in a mutual fund that tracks a major index like the Russell 2000 or S&P 500.

Answer 2

Hi, unless you've reached the age of majority in your country, you are not legally allowed to enter into a contract to purchase stock. The age of majority in most countries is 18 however this varies and is as high as 21 in some countries. To purchase stock, you would have to have either your parents or parent or guardian purchase the stock in your name. Otherwise you'll need to wait.

Answer 3

You need a brokerage account with a stock broker who offers online services. The account agreement is a contract, so you must be legally able to sing contracts where you live.

Answer 4

This is not an answer to your question but it gives me hope to find people in their teens interested in investment and finances.

Answer 5

look into dividend reinvesting programs like i am. they seem better.