Step 1: Select a brokerage firm (i.e., a company that offers investment accounts).
When possible, it may be best to use the same brokerage firm as your parents. As another option, YIS is proud to partner with Stockpile® and Fidelity Investments® to provide custodial accounts to YIS club members. You are also free to open a custodial account with any of the many other firms that offer such accounts.
We recommend calling a customer service representative or visiting a branch to learn more about the types of custodial accounts. Both Stockpile® and Fidelity Investments® have customer service representatives and apps that can assist you in the decision-making process. Fidelity Investments® has physical branches that you can visit to open a custodial account.
Step 2: Open a “custodial account” at a brokerage firm with a trusted adult.
A custodial account is an account established with a brokerage firm for a minor (you) by a trusted adult —parent, grandparent, aunt, uncle, family friend, etc. The account becomes completely yours between the age of 18 and 21 years old, depending on the state you live in.
The Dollar-a-Day challenge works with two different kinds of custodial accounts: Custodial brokerages and IRA accounts. Each has different rules and features. As you have learned throughout your involvement with YIS, you should do your homework and determine with your parent or guardian which type of account is best for you.
If you are 18 or older, you can open a regular brokerage account on your own.
Step 3: Link your custodial account to your regular savings account.
Once your application for a custodial account is fully approved and the account is established, it is time to start investing a portion of the money you earn!
Usually the easiest way to get your Dollar-a-day savings from your savings account to your new brokerage account is to “link” the two accounts using the instructions provided by your brokerage firm.
Using the brokerage’s app or website, you can start buying mutual funds, ETFs, or individual stocks. Be mindful of the differences in transaction costs or expense ratios for each investment type.
If you have any questions regarding your account, please reach out to your brokerage firm for help. They are in the best position to provide the help you need.