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How Old Do You Have to be to Invest in Stocks?

Don't Work Another Day is reader-supported. We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own.
  By Forrest McCall | Last Updated:  May 14, 2020

So you want to invest, but aren’t sure how old you have to be?

To register for a typical brokerage account, you’ll need to be at least 18 years of age.

But don’t lose hope, there are several other options enabling you to invest your money, even if you aren’t 18 quite yet.

Keep reading to learn about investing at any age and some of the best ways to invest your money.

Investing in the Stock Market as a Teen

For those in their teenage years, you have several options if you want to invest.

From having your parents invest for you with a standard brokerage account to opening a custodial IRA account, you might be surprised how easy investing your money can be.

Have Parents Invest for You

Because of the Uniform Gift to Minors Act and the Uniform Transfer to Minors Act, parents are capable of investing money in their children’s names.

Your accounts will be virtually identical to a standard brokerage account, allowing you to buy and sell investments as you see fit.

When your child comes of age, the account will be transferred into their name.

Utilize Custodial IRAs

If planning to invest for the long term, an IRA can be a great way to grow your money over the long haul. These accounts are meant for saving for retirement and allow your money to grow tax-deferred.

Your child must have earned income to qualify for an IRA account and the contribution amount is capped at the lesser of their income or the IRS mandates.

A traditional IRA lets you deduct your contributions in the year they are made.

It’s important to watch out for any penalties that apply for withdrawing early on your money. Because of this, many will opt for a Roth IRA instead

Take Advantage of a Custodial Roth IRA

Similar to a standard IRA, a Roth IRA also lets you grow money tax-free (after 5 years). The main difference between a Roth IRA and a traditional IRA is when and how taxes come into play as well as how penalties are enforced.

A Roth IRA allows you to withdraw money out of your account without a penalty, whereas a traditional IRA will cost you a 10% penalty plus income taxes owed on that amount at your current rate for any withdraw before retirement.

NOTE: You’ll need to hold money for at least 5 years to avoid penalties.

A Roth IRA does not offer any tax advantages in the year contributions are made. Instead, you’ll benefit from avoiding taxes during the time of the withdraw.

Consider a 529 Savings Plan

For parents looking to save for their children’s continued education costs, a 529 savings plan is built just for that.

When the time comes, you’ll benefit from tax breaks if your funds are used for educational costs.

Funds are contributed with post-tax dollars and are eligible to grow tax-free if used for education expenses.

If you choose to spend the money elsewhere, a penalty will be enforced.

These accounts are managed by individual states so be sure to check your state’s rules and regulations regarding 529 accounts.

Related Reading: 11 Best Desalination Stocks for ESG Investing

Opening a Stock Brokerage Account

Before opening a brokerage account, you’ll need to follow a few steps to ensure you make the right decisions.

Compare Brokerage Accounts

You’ll first want to compare different brokerage accounts and understand the features of each.

Today, many brokerages have eliminated trading commissions, something that previously cost investors hundreds to thousands per year.

You should try to find a brokerage with $0 commissions and that you find easy to use and manage your money.

Register For Your Account

Once you’ve evaluated which brokerage is right for you, you’ll need to register for an account.

You’ll be required to submit various personal and financial background information in order to have your account verified.

Add Your Funds

Once your registration is complete, it’s time to add funds to your account.

There are several methods of funding your brokerage account, but the easiest will most likely be through a checking or savings account.

Some of the other methods are:

  • Mailing a check
  • Transferring funds from another account
  • Automatic withdraws using electronic banking

How Much Should I Deposit?

When you decide to invest, you need to be comfortable without access to your money for 6 months or longer. Many financial advisors recommend increasing this number to over 12 or 18 months, limiting short term volatility.

Once you’ve decided what you’re comfortable with, you should decide whether you’d like to invest your money all at once, or over time.

It’s recommended to invest a large sum over time to take advantage of dollar-cost averaging.

When it comes to determining how much you should invest, never push yourself. Do what you feel comfortable with.

Curious how much you can make investing in stocks each month? The answer might surprise you.

Start Trading

Now that you’ve funded your account, it’s time to start trading, or buying and selling investments.

This is the part when most individuals will become overwhelmed with options. There are thousands of investments to choose from so how should you decide what to invest in?

Know Your Goals

When determining what to invest in, you’ll need to understand a few things. You should know what amount of income you’d like to reach.

Someone looking for 3% annual gains will invest in different companies, ETFs, or mutual funds than those looking for a 7% annual portfolio appreciation. Others might look for ESG stocks.

Know Your Risk Tolerance

Before investing, you should know how much risk you are willing to take. With risk, comes reward. By taking slightly more risk, you can anticipate larger returns than a low-risk asset like a savings account.

Go the Easy Route

If you do not want to go the route of deciding which investments to make, you can instead invest in an ETF or mutual fund.

These investments are groups of stocks and other investments that are considered well-diversified and therefore lower risk.

Other Investing Options for Teens

If you don’t want the risk that comes with holding stocks, there are some other more conservative options you can take advantage of.

Related: How to Make Money as a Kid

High-Interest Savings Accounts

While you’ll still need a parental guardian to open this account, you can earn anywhere from 1-2% annually on your deposits.

This amount is subject to change based on market rates but is a good option for those looking for virtually zero risk that negates the effects of inflation.

Start a Business

Instead of opting to invest in stocks or a savings account, you could consider starting a business to grow your money.

Businesses like lawn care, car detailing, or online businesses can make great candidates for teens.

These businesses can be started with a relatively low amount of upfront costs and can scale as bandwidth is available.


When it comes to investing, the more time you have, the greater your returns will be. Therefore, starting at a young age is a wise decision to start your financial journey down the right path.

For those under the age of 18, your parents can offer several options for you to start investing in the stock market. From an individual brokerage account to a Roth IRA, or 529 savings account, there are several options to invest in your future.

It’s a good idea to start investing small and take advantage of dollar-cost averaging to decrease short term volatility in your investments.

With thousands of investments to choose from, it’s easy to become overwhelmed. For those looking to get started without much research, a low-cost ETF or mutual fund is most likely your best bet.

These investments will provide market returns without the volatility of owning various stocks.

Did you start investing at a young age? Comment your experiences below!

Need more help? Check out our Beginners Guide to Investing in the Stock Market!

Forrest is a personal finance, entrepreneurship, and investing expert dedicated to helping others obtain life long wealth. He has a Bachelor's degree in business and has been featured in many popular publications including Forbes, Business Insider, Bankrate, CNET Money, and many others. To learn more about Forrest, visit the About Us Page for more info.
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