M1 CUSTODIAL ACCOUNTS

Start building their future

It’s never too early to start investing in your children. With a long runway for potential growth, M1 Custodial Accounts can help set up the next generation for long-term success.

Get started

What is a custodial account?

A custodial account allows you to invest on a child’s behalf. This taxable account is controlled by an adult custodian (parent, guardian, relative, etc.) until the minor reaches a certain age (ranging from 18-25, depending on your state). At that point, the account assets transfer into the minor’s name, and they take over from there.

The funds can be used for anything benefiting the child—not just education, but housing, living expenses or continued investing. There are no contribution limits for this type of account, but gift tax rules may apply.

Give a child a strong start

Teach the value of a long-term mindset
As custodian, you guide the investment strategy until your beneficiary comes of age—then the account is theirs to build and control.

Time is the precious recourse
At M1, we agree that time in the market beats timing the market. Investing early on a child’s behalf helps give them an edge compared to those who begin investing in adulthood.

Tailor your investing strategy
Investing isn’t limited like a 529 plan. Build a Pie made up of the stocks and ETFs you want—then automate the rest.

Your custodial account questions, answered

Go to Help Center

529 plans are specific to education costs. A custodial account is not specific to educational savings. Funds saved in a 529 plan and used for education have tax benefits, whereas funds in a custodial account that are used for education do not come with tax benefits for educational costs. Furthermore, custodial accounts are irrevocable when the beneficiary comes of age, unlike a 529 where the account owner can change the beneficiary and maintains control of the funds regardless of the beneficiary’s age.

529 plans are specific to education costs. A custodial account is not specific to educational savings. Funds saved in a 529 plan and used for education have tax benefits, whereas funds in a custodial account that are used for education do not come with tax benefits for educational costs. Furthermore, custodial accounts are irrevocable when the beneficiary comes of age, unlike a 529 where the account owner can change the beneficiary and maintains control of the funds regardless of the beneficiary’s age.

Yes, with restrictions: any withdrawal from a custodial account must be for the use and benefit of the minor.

The age of majority can range from 18 to 25 years old and varies based the state you live in. You may want to ask a financial consultant about the laws in your state.

Any funds used prior to the age of majority must be used for the sole benefit of the minor. Unlike college savings plans, there is no penalty if account assets aren’t used to pay for education. Once the minor reaches adulthood, the minor will have full control of the assets and can use them for any purpose—educational or otherwise.

Invest in your loved ones
Open a custodial account
Long-term investing interface on M1



SAIF-04012025-cvhfq8jj