This is an excellent question and a very important one for anyone looking to invest in the future of a minor! Creating a custodial account allows you to invest on behalf of a child, giving them a head start on financial literacy and wealth building. While Webull is a popular platform for its commission-free trading and advanced tools, it's crucial to understand their specific account offerings.
Important Note Before We Begin: As of my last update, Webull does not currently offer traditional UGMA/UTMA custodial accounts. Their official support documentation generally indicates they support individual cash and margin accounts, as well as IRAs (Traditional, Roth, Rollover). While they are a great platform for individual investors, if your primary goal is to open a dedicated custodial account for a minor where assets are irrevocably owned by the minor and transferred at the age of majority (18 or 21 depending on the state), you might need to explore other brokerage firms that specialize in or explicitly offer UGMA/UTMA accounts.
However, if you're a parent or guardian looking to invest for a minor and maintain control, there are still ways to use Webull effectively, though it won't be a "custodial account" in the traditional sense. This guide will focus on how to leverage Webull as an adult to invest with the intention of benefiting a minor, and what considerations you'll need to keep in mind.
Understanding the Nuance: Investing for a Minor on Webull (When a Custodial Account Isn't Directly Available)
Since Webull does not currently offer a dedicated UGMA/UTMA custodial account, the most direct way for an adult to invest for a minor on Webull would be to:
Open an individual brokerage account in your own name. You would then manage this account with the intention of using the funds for the minor's future.
Utilize Webull's IRA options if the minor has earned income. If the minor has earned income (e.g., from a part-time job, babysitting), you could open a Roth IRA in their name. This is a very specific type of account and has contribution limits and rules, but it offers significant tax advantages.
This guide will primarily focus on the first scenario, as it's the most common approach when a brokerage doesn't offer UGMA/UTMA.
Step 1: Are You Ready to Begin Your Child's Investment Journey? Let's Find Out!
Before we dive into the "how-to," let's take a moment. Are you excited about the prospect of planting financial seeds for a young person's future? It's a fantastic decision that can truly impact their long-term well-being. Investing early, even small amounts, can harness the power of compounding and lead to substantial growth over time. If you're ready to embark on this journey and understand the unique considerations when using Webull for this purpose, then let's proceed!
Step 2: Choosing Your Webull Account Type (and Understanding the Implications)
As discussed, Webull doesn't offer a direct "custodial account" in the UGMA/UTMA sense. Therefore, you'll be opening an account in your own name and managing it for the minor's benefit.
Sub-heading 2.1: Opening an Individual Brokerage Account
This is the most straightforward path. You'll open a standard individual cash or margin account on Webull.
Who owns the assets? You do. Legally, the assets in this account belong to you. This means you have full control over the investments, including buying, selling, and withdrawing funds.
Tax implications: Any capital gains, dividends, or interest earned in this account will be reported under your Social Security Number (SSN) and will be subject to your personal income tax rates.
Flexibility: This offers the most flexibility as you can use the funds for any purpose, not just for the minor's benefit. However, it also means there's no legal obligation to use the funds for the minor.
Sub-heading 2.2: Considering a Custodial Roth IRA (If Applicable)
If the minor you're investing for has earned income (e.g., from a job), a Custodial Roth IRA is an excellent option with significant tax advantages.
Who owns the assets? The minor legally owns the assets in a Roth IRA. However, as the custodian, you manage the account until they reach the age of majority.
Tax implications: Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. This is a huge benefit!
Contribution limits: Roth IRAs have annual contribution limits, which are tied to the minor's earned income. For example, for 2025, the limit is likely around $7,000, or 100% of their earned income, whichever is less.
Purpose: The primary purpose of a Roth IRA is retirement savings. While there are provisions for penalty-free withdrawals for certain qualified expenses (like a first-time home purchase or higher education), the main goal is long-term retirement growth.
Webull's offering: Webull does offer Traditional, Roth, and Rollover IRAs. If your minor qualifies, this is a very strong option to consider.
For the remainder of this guide, we will assume you are opening an individual brokerage account on Webull with the intent of investing for a minor, as this is the most common scenario given Webull's current account types.
Step 3: The Webull Account Opening Process (Your Path to Investing!)
The account opening process on Webull is generally streamlined and app-focused.
Sub-heading 3.1: Downloading the Webull App and Initial Sign-up
Download the Webull App: Head to your smartphone's app store (Google Play Store for Android or Apple App Store for iOS) and search for "Webull." Download and install the application.
Initiate Sign-up: Open the app. You'll typically see a "Sign Up" or "Open Account" button. Tap it.
Register with Phone/Email: You'll be prompted to register using your phone number or email address. Choose your preferred method and follow the prompts.
OTP Verification: A One-Time Password (OTP) will be sent to your registered phone or email. Enter this code to verify your identity.
Set Your Login Password: Create a strong, unique password for your Webull account. It typically requires a combination of uppercase letters, lowercase letters, numbers, and special characters.
Sub-heading 3.2: Completing the Account Application
Once your basic login is set up, you'll proceed to the full account application. This involves providing personal and financial information.
Click "Open Account": Within the app, look for a prominent "Open Account" button or section.
Provide Personal Information:
Full Legal Name: Your name, exactly as it appears on your government ID.
Date of Birth: Your birthdate.
Social Security Number (SSN): This is critical for tax reporting. Remember, since this account will be in your name, your SSN will be used.
Residential Address: Your current physical address.
Contact Information: Phone number and email address.
Citizenship: Your country of citizenship.
Employment Information:
Employment Status: Employed, retired, student, etc.
Employer Name and Address: If employed.
Occupation/Industry: Your job title and the industry you work in.
Financial Information:
Annual Income: Your estimated annual income.
Net Worth: Your total assets minus liabilities.
Liquid Net Worth: Assets easily convertible to cash.
Investment Experience: Your level of experience with different investment products (stocks, options, etc.). Be honest here, as it can influence what trading permissions you receive.
Investment Objectives: Your goals (e.g., growth, income, speculation). For investing for a minor, "Growth" is usually the primary objective.
Regulatory Questions: You'll answer questions about being a control person at a public company, having an affiliation with FINRA, or being a director/senior officer of a public company.
Account Type Selection: Choose between a Cash Account (you can only trade with settled cash) or a Margin Account (allows borrowing to invest, comes with higher risk). For beginners or those investing for a minor, a Cash Account is generally recommended for its simplicity and reduced risk.
Review and Submit: Carefully review all the information you've provided. Accuracy is paramount to avoid delays. Once confident, submit your application.
Sub-heading 3.3: Identity Verification and Document Uploads
Webull, like all regulated brokerages, needs to verify your identity.
Photo ID: You'll typically be asked to upload a clear photo of a valid government-issued ID (e.g., Driver's License, Passport, State ID).
Proof of Address (sometimes): In some cases, you might be asked for proof of address, such as a utility bill or bank statement issued within the last 3 months, clearly showing your name and address.
Selfie/Liveness Check: Webull often incorporates a live selfie or video verification to ensure you are who you say you are. Follow the on-screen instructions carefully.
Sub-heading 3.4: Account Review and Approval
After submission, Webull's compliance team will review your application.
Processing Time: This typically takes 1-3 business days.
Notifications: You'll receive notifications via the app or email once your account is successfully opened.
Potential for Additional Information: Sometimes, Webull might request additional documents or clarifications if there are discrepancies or missing information. Respond promptly to these requests to avoid further delays.
Step 4: Funding Your Webull Account (The First Step to Investing!)
Once your account is approved, it's time to add funds so you can start investing for the minor.
Sub-heading 4.1: Linking Your Bank Account
Navigate to "Deposit": In the Webull app, go to your "Menu" or "Account" section and look for the "Deposit" option.
Select "Bank Transfer" (ACH): This is the most common and usually fee-free method for depositing funds from your bank.
Connect Your Bank Account:
Plaid Integration: Webull often uses Plaid, a secure third-party service, to link your bank account. You'll typically log in to your online banking through Plaid's secure portal.
Manual Entry (if Plaid isn't an option): If Plaid isn't available for your bank, you might need to manually enter your bank's routing number and your account number.
Micro-deposits: If you manually link, Webull might send two small "micro-deposits" (e.g., $0.05 and $0.12) to your bank account. You'll then need to verify these amounts in the Webull app to confirm the link.
First Deposit Amount: Decide how much you want to deposit initially. Be aware of any minimum deposit requirements Webull might have (though often it's $0 for opening an account, a minimum might be needed for certain features or promotions).
Sub-heading 4.2: Initiating a Deposit
Enter Deposit Amount: Once your bank account is linked, specify the amount you wish to transfer.
Confirm Transfer: Review the details and confirm the transfer.
Processing Time: ACH transfers usually take 3-5 business days to fully clear and be available for trading. Webull may offer "instant buying power" for a portion of your deposit, allowing you to trade sooner, but the funds won't be fully settled until the ACH transfer completes.
Sub-heading 4.3: Other Funding Methods (Less Common for Initial Deposits)
Wire Transfer: Faster than ACH but often incurs fees from both your bank and Webull. Useful for larger, time-sensitive deposits.
Account Transfer (ACATS): If you have an existing brokerage account with another firm that you wish to transfer to Webull, you can initiate an ACATS transfer. This moves your entire account (cash and investments) from one broker to another. This can be complex and typically takes 1-3 weeks.
Step 5: Investing for the Minor's Future (Your Investment Strategy)
Now that your account is funded, it's time to decide what to invest in! Since this is an account in your name, you have complete control.
Sub-heading 5.1: Research and Education
Webull's Tools: Webull offers a wealth of research tools, charting capabilities, and news feeds. Utilize these to research potential investments.
Educational Resources: Webull also has educational content. Take advantage of it to learn about different asset classes, investment strategies, and risk management.
External Resources: Don't limit yourself to Webull's resources. Websites like Investopedia, NerdWallet, and reputable financial news outlets offer valuable insights.
Sub-heading 5.2: Choosing Investment Vehicles
Consider the minor's age, your investment horizon, and your risk tolerance.
Stocks: Individual company shares. Offer high growth potential but also higher risk.
Consider fractional shares: Webull allows you to buy fractional shares of many stocks, meaning you can invest a dollar amount (e.g., $50) instead of needing to buy a whole share, making investing in high-priced stocks more accessible.
ETFs (Exchange-Traded Funds): Baskets of stocks, bonds, or other assets that trade like stocks. Offer diversification and lower risk than individual stocks. This is often a good choice for long-term investing for a minor.
Options: More complex and higher-risk derivatives. Generally not recommended for beginners or for investing long-term for a minor due to their speculative nature.
Cryptocurrency: While Webull has re-introduced crypto trading in some regions, it's highly volatile and speculative. Not typically recommended for long-term, stable growth for a minor's future.
No Mutual Funds/Limited Bonds: Be aware that Webull currently does not offer mutual funds and has a limited bond offering (primarily Treasury bonds and bond ETFs). If you prefer these asset classes, you might need to use another brokerage.
Sub-heading 5.3: Placing Trades
Search for Assets: Use the search bar in the Webull app to find the stock or ETF you want to buy.
Analyze the Data: Review charts, news, company financials, and analyst ratings.
Place Your Order:
Buy/Sell: Select "Buy."
Order Type:
Market Order: Executes immediately at the current market price (can be unpredictable).
Limit Order: Allows you to set a maximum price you're willing to pay. This is generally preferred for greater control.
Quantity/Amount: Enter the number of shares or the dollar amount you wish to invest (for fractional shares).
Time-in-Force: How long your order remains active (e.g., Day, GTC - Good 'Til Canceled).
Confirm and Execute: Review your order details and confirm the trade.
Step 6: Monitoring and Managing Your Investments
Investing is not a one-time event. Regular monitoring and occasional adjustments are key.
Sub-heading 6.1: Regular Review
Performance Tracking: Webull provides clear visuals of your portfolio's performance. Regularly check how your investments are doing.
News and Updates: Stay informed about the companies or ETFs you hold, as well as broader market trends.
Financial Goals: Periodically revisit your investment goals for the minor. Are you on track? Do you need to adjust your contributions or strategy?
Sub-heading 6.2: Rebalancing (If Necessary)
Over time, your portfolio's asset allocation might drift from your initial target. Rebalancing involves selling some assets that have grown significantly and buying more of those that have lagged, bringing your portfolio back to your desired risk level.
Sub-heading 6.3: Understanding Tax Implications (For Your Individual Account)
Since the account is in your name, you are responsible for the taxes.
Capital Gains: When you sell an investment for a profit, you'll owe capital gains tax. This can be short-term (if held for less than a year, taxed at ordinary income rates) or long-term (if held for more than a year, taxed at lower rates).
Dividends and Interest: Any dividends received from stocks or interest from bonds (if applicable) are also taxable income to you.
Tax Documents: Webull will provide you with necessary tax documents (e.g., Form 1099-B for sales, Form 1099-DIV for dividends) at the end of the year. Consult a tax professional for personalized advice.
Step 7: Planning for the Future Transfer (Crucial for a Minor's Benefit)
Since the Webull account is in your name, you'll need a plan for eventually transferring these assets to the minor when they reach adulthood or a specific milestone (e.g., college).
Sub-heading 7.1: Gifting Assets
Annual Gift Tax Exclusion: You can gift a certain amount of money or assets to any individual each year without incurring gift tax implications for yourself or the recipient. For 2025, this amount is generally $19,000 per person ($38,000 for married couples filing jointly).
Direct Transfer/Gifting: When the time comes, you can simply transfer cash or securities directly from your Webull account to an account opened in the minor's name (once they are of legal age to open their own brokerage account). Be mindful of the gift tax exclusion.
Consult a Financial Advisor: For significant sums or complex situations, always consult a financial advisor or estate planner. They can help you navigate gifting strategies, potential tax implications, and ensuring your intentions are met.
Sub-heading 7.2: Establishing a Trust (More Complex)
For larger sums or more control over how the money is used, you could establish a trust. This is a legal entity that holds and manages assets for beneficiaries. However, setting up a trust is a complex legal process and involves ongoing costs. This would be independent of your Webull account, and you would likely transfer assets from your Webull account into the trust over time.
Final Thoughts on Investing for a Minor with Webull
While Webull may not offer a dedicated custodial account, its user-friendly platform, commission-free trading, and robust research tools still make it a viable option for parents and guardians who wish to invest for a minor through an account in their own name. The key is to be fully aware of the legal and tax implications and to have a clear plan for eventual transfer of assets. For traditional custodial accounts (UGMA/UTMA) with automatic transfer of ownership at majority, you will need to look at other brokerages.
10 Related FAQ Questions
How to choose the best investments for a minor's future?
Quick Answer: Focus on long-term growth. Consider diversified low-cost ETFs, broad market index funds (if available elsewhere), or stable blue-chip stocks. Avoid highly speculative investments.
How to teach a minor about investing using Webull (even if the account isn't in their name)?
Quick Answer: Use Webull's "Paper Trading" feature to let them practice with virtual money. Explain how different investments work, interpret charts, and discuss market news together.
How to handle taxes when investing for a minor in my individual Webull account?
Quick Answer: All income (dividends, capital gains) generated in your individual Webull account will be taxed under your SSN at your personal tax rates. You'll receive a 1099 form from Webull for tax reporting.
How to gift money from my Webull account to a minor without major tax implications?
Quick Answer: Utilize the annual gift tax exclusion (e.g., $19,000 per person for 2025). You can directly gift cash or transfer shares up to this amount without incurring gift tax. For larger amounts, consult a tax advisor.
How to transfer assets from my Webull account to a minor once they are an adult?
Quick Answer: Once the minor reaches the age of majority, they can open their own individual brokerage account. You can then initiate an "in-kind" transfer of securities or sell assets and gift the cash.
How to ensure the money I invest on Webull actually benefits the minor?
Quick Answer: Since it's your individual account, the legal obligation isn't there. Maintain clear records, communicate your intentions with the minor (as they get older), and consider establishing a legal trust if you desire greater control over the future use of funds.
How to use Webull's fractional shares feature to invest for a minor?
Quick Answer: When buying a stock, choose to invest a specific dollar amount instead of a number of shares. This allows you to invest small amounts into high-priced stocks, making diversification easier.
How to set up recurring investments on Webull for a minor's growth?
Quick Answer: Webull allows you to set up recurring deposits from your linked bank account. Once funds arrive, you can manually invest them or use Webull Advisors (their robo-advisory service) for automated investing in a diversified portfolio.
How to learn more about Webull's features for long-term investing?
Quick Answer: Explore Webull's "Learn" section within the app, watch their tutorial videos, and experiment with the "Paper Trading" account to get comfortable with the platform's functionality and tools.
How to find alternative brokerages that offer traditional UGMA/UTMA custodial accounts?
Quick Answer: Research well-established brokerages like Fidelity, Charles Schwab, Vanguard, and E*TRADE. Many of these firms explicitly offer UGMA/UTMA accounts designed for investing on behalf of minors.