Investors of all levels are always looking for new, innovative ways to grow their money. One of the newer investment platforms on the scene is Webull, which has quickly become a favorite among traders and beginners alike.
But does Webull offer custodial accounts? No, Webull does not offer custodial accounts. To open an account with Webull, you must be at least 18 years old and have a valid Social Security number.
Why Webull Doesn’t Allow Custodial Accounts
In a custodial account, the parent, grandparent, or an adult relative of a child can invest on her behalf to provide for the future educational, business, or other needs of the child.
All the funds thus invested will become an asset of the child after she grows up to handle it. It is her choice at maturity to use the funds as she wants. She can take out all the funds and invest in some other option of her choice.
Custodial accounts are not handled by actual owners. Moreover, custodial accounts come with the disadvantage of hampering the chances of minors to avail financial services for higher education loans.
These limitations of custodial accounts have probably made Webull to keep them off from their list of account types.
Webull’s Alternative to Custodial Accounts
Webull allows creating cash and margin accounts, which are mainly meant for adults to manage their investment portfolio. Webull doesn’t offer custodial accounts to its subscribers to include minors of the family and hold any financial assets for their future.
Webull’s one feature – paper Trading can be utilized as an alternative to this limitation. Paper trading is also called hypothetical trading and can be used to give investment experience to young traders who still have some years to join as real investors.
Minors can create a virtual portfolio without real money deposits. This portfolio emulates a real account. It can be set up like other Webull accounts and a young investor can monitor movements of the fake investments. They don’t need to deposit and trade with real money into a paper trading account.
Minors can learn a great deal about trading and use this experience in future Webull cash or margin accounts. They can learn about different techniques that involve zero risks.
Why do Investors want to open Custodial Accounts?
Custodial accounts are mostly chosen by investors who want to trade on behalf of their minor children and gift them a ready-to-use investment asset to take over when they grow adults. It is a kind of financial security for children.
A custodial account is also known as Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA). The parents plan the custodial accounts to have full flexibility of investment of their liking and save substantial amounts to fund higher education or other unplanned but large expenses in the future for their kids.
Since funds in a custodial account are like a permanent gift that is handed over to children. They are the child’s assets to be used for their own needs.
A custodial account is considered a good choice for cash management for children with a good range of investment options to meet the required funds. The contributions are quite flexible providing good tax benefits to investing parents.
So, many parents due to tax benefits and planning a child’s financial assets prefer to open Custodial Accounts.
Mutual Fund Vs. Custodial Account in Webull
Webull doesn’t allow you to open a mutual fund trading either just like Custodial Account.
Can I have a Webull Joint Account with my Child in Place of Custodial Account?
Webull does not allow an account as a joint account for an adult and a minor.
Age to Open Account in Webull
Webull has a well-defined policy regarding the age of its subscribers to start investing. Webull does not permit minors to open an account. You need to be of 18+ years of age to start investing with the Webull platform.
So, if you are eager to start trading right now and you think that you have a really good pulse of the market, why don’t you ask your parents to open a Webull account in their name and suggest to them how, where, and when to trade.
This way you will get a good trading experience and you can register immediately with Webull as soon as you hit the 18 years age mark.
Custodial Accounts- Acorn or Schwab – Our Take
If you are still insistent on custodial account then there are two options available.
- Acorn – Acorn is a micro-investing app that allows an investment account for minors as soon as a baby comes to the world. It is named Acorns Early and is classified as a UGMA account. It is a very flexible account.
- Schwab – This brokerage platform offers Schwab One as its Custodial Account. It works like a financial gift to a minor. A minor can learn about investing with the help of an adult who sets the account and manages it till the child attains 18 years of age.
Webull is trusted as a good virtual platform to trade in stocks and cryptos. It’s not a tailor-made choice when you are looking forward to a financial management plan for your child in the shape and benefits of a custodial account or even a joint account.
Currently, Webull is lacking in this feature. But, looking at the huge number of investors who are searching for a reliable platform for a custodial accounts, Webull may have to rethink and start this option in the app very soon.