How to open a Citibank custodial account for kids. Citibank UTMA/UGMA investment assets in a brokerage account for teenagers and children.

Custodial Accounts with Citibank

Yes, it is possible to open a custodial brokerage account at Citi. Whether you would actually want to do so is an entirely different question. Continue reading for more information.

Citi offers both UGMA and UTMA accounts. These are custodial accounts that allow minors to open brokerage accounts with the help of a custodian. Hence the name.

What Citi does not offer is a convenient online application form. Although the brokerage firm does have a website for account management and trading, to actually get an account open you’ll need to call in and submit your application verbally over the phone (the broker’s number is 800.846.5200). After that, the company will send you some electronic paperwork that you’ll need to fill out and send back.

While all of this is rather cumbersome, it is possible to get a custodial account open at Citi if that’s where you want to have one.

Although the brokerage arm of Citi is known for some pretty startling fees, custodial accounts are exempt from yearly account fees, which obviously makes them a little more affordable.

UGMA/UTMA accounts are not exempt from Citi’s commission schedule, however, which is a long way away from the brokerage industry’s flat $0 system. Expect to pay anywhere from $0 to $65 for an equity trade, depending on how many total assets you have on deposit with Citigroup.

Other Citibank Accounts for Minors

Citi also has the Coverdell Education Savings Account, which could be a good idea if you're looking to save some money for a child’s or grandchild’s education and want to capture some higher tax benefits than what a UTMA/UGMA offers. The latter, for example, puts a limit on tax-free earnings, but the Coverdell does not.

On the flip side, the Coverdell has limits on annual contributions, while the custodial account does not. They both have their own advantages and disadvantages.

Citi has the same commission schedule for the Coverdell account. However, the Coverdell is not exempt from Citi’s annual fees. Expect to pay a $100 fee each year the account is below $25,000 or not part of Citi Priority. The annual account fee is $75.

Citi does hit a home run out of the park by offering a 529 plan, an unusual service by a discount broker. A 529 account is another way to save for a minor’s education while capturing some tax breaks. Like the custodial account, a 529 is exempt from Citi’s annual fees.

Learning Materials at Citi for Young Investors

During our research, we found very little in terms of educational content geared towards beginning investors. There is a Research tab at the top of the brokerage site. It has heat maps, news articles from Reuters, the day’s market movers, and information on interest rates. Unfortunately, there’s not much else available.

TD Ameritrade as a Low-Cost Alternative

If you want to skip the Citi's high fees, you could open a custodial account online in just a few minutes with a discount broker if you’re willing to walk away from Citibank and give TD Ameritrade a try.

TD Ameritrade has a user-friendly online application form for custodial accounts. Just click here and click on the link at the top of the site that says Open New Account. Look for the account option that says UTMA/UGMA. These are the custodial accounts. The correct one will automatically be selected for you based on your state of residency.

TD Ameritrade UTMA Account

TD Ameritrade’s custodial accounts have a long list of tradable instruments, including options, stocks, closed-end funds, mutual funds, ETFs, equities, and bonds. There are no minimums or account fees, and a custodial account can easily be linked to an existing TD Ameritrade account if you already have one.

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Open TD Ameritrade Account

Open TD Ameritrade Account

Taxation of Custodial Accounts

One of the primary reasons for opening a UGMA or UTMA account is to gain some tax breaks. Nevertheless, a custodial account can still be subject to taxation. Annual earnings above $2,100 are fully taxable, and contributions are not deductible.

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