How to open an M1 Finance custodial account for kids. M1 Finance UTMA investment assets in a brokerage account for teenagers and children.

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M1 Finance Custodial Account

M1 Finance is one such brokerage house that does offer custodial accounts for young investors. Both UTMA and UGMA accounts are available through M1 Plus, which is M1’s investment package on steroids.

Although there is a fee for M1 Plus, there are many perks that come with the membership. The annual charge is $125, and the company has been offering first-year waivers lately.

M1 Custodial Account

Besides custodial accounts, M1 Plus comes with these highlights:

- Two trading windows per market day (a regular M1 account only has one).

- Smart Transfers: these are trigger-based asset transfers that move funds from one M1 Pie or account to another.

- Reduced borrowing rates: 4.25% instead of 5.75%. Custodial accounts are not eligible for borrowing, however.

- Increased perks with M1 Spend, the company’s checking account. Benefits include 1.7% interest (hard to find nowadays), multiple card designs, and 4 ATM fee refunds per month.

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Opening a M1 Custodial Account

To open a custodial account at M1 Finance, you’ll first want to become an M1 member by signing up: Get $10 for making a $100 deposit. Simply click on the Get Started or Sign Up Now button on the front page and enter your e-mail address and create a password. With login credentials, you can then open a custodial account.

Once logged in, find the Add account link in the upper-right corner of the site. Click on this and you’ll get a selection of accounts you can open.

Remember that you’ll need an M1 Plus membership to get the custodial option. You can add M1 Plus to your account by clicking on the account icon in the upper-right corner (it has your name on it) and selecting M1 Plus from the drop-down menu.

Benefits of M1’s Custodial Accounts

M1’s brokerage accounts, whether in regular or custodial format, attempt to simplify the investing process as much as possible. This outlook would obviously be of value for beginning investors.

Although do-it-yourself trading is somewhat possible at M1 Finance, the company specializes in Pie investing. A Pie is a basket of assets (specifically, stocks, ETFs, and closed-end funds) that M1 Finance has created. It’s similar to a fund itself, although there are important differences. For example, with a Pie, target percentages are automatically rebalanced as you deposit and withdraw funds.

M1 Finance offers several themes for Pies, like income, cannabis, global growth, and socially-responsible investing.

M1 Finance also publishes educational articles through its Learn center, its blog, and its newsletter The Investor’s Mindset.

M1 UTMA Account

Tax Consequences of UTMA and UGMA Accounts

Both UTMA and UGMA accounts come with some important tax consequences, both good and bad. For example, earnings up to a certain level are tax free, but contributions could reduce a minor’s eligibility for financial aid at school. Consult a professional tax advisor for more information.

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