In most of the United States, you can open your own brokerage account and start investing in stocks at age 18. Alabama and Nebraska set the threshold at 19, and Mississippi requires you to be 21. If you’re younger than the age of majority in your state, you can still own stocks through a custodial account that a parent or guardian opens and manages on your behalf.
The Age to Open Your Own Brokerage Account
Brokerages require you to be old enough to sign a legally binding contract before they’ll let you trade on your own. A contract signed by a minor can be voided, and no firm wants to process trades through an account whose underlying agreement might not hold up in court. That’s why the age of majority in your state controls when you can open an individual account.
In most states, that age is 18. Two exceptions raise the bar: Alabama and Nebraska set the threshold at 19, and Mississippi at 21. Once you reach that age, you can open a brokerage account independently, execute trades, and make investment decisions without anyone else’s involvement.
Emancipated Minors
Minors who have obtained a court order granting them adult legal status before the standard age generally have the right to enter contracts. Whether a particular brokerage will accept that court order is a separate question. Policies vary by firm, and you’ll likely need to provide certified copies of the emancipation order during the application process.
How to Invest Before You Turn 18
You don’t need to wait until 18 to own stocks. Two account structures let minors hold investments while an adult handles the management.
UGMA and UTMA Custodial Accounts
The Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA) both allow an adult custodian to open an investment account on behalf of a child. The money and securities in the account legally belong to the minor from the moment they’re deposited. The custodian manages the holdings and has a fiduciary duty to act in the child’s best interest.
UGMA accounts hold financial assets like stocks, bonds, and mutual funds. UTMA accounts can also hold broader property types including real estate. Contributions to either type count as gifts under federal tax law. For 2026, each person can give up to $19,000 per recipient per year without triggering the federal gift tax reporting requirement.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Control of the account transfers to the former minor at the age set by state law, typically between 18 and 21. Some states let the person who created the account extend the transfer age to 25 if that’s specified when the account is opened. Once the transfer happens, the young adult has full authority over the assets.
Custodial Roth IRAs for Minors With Earned Income
If a child has earned income from a job, they may qualify for a custodial Roth IRA. The IRS doesn’t set a minimum age for IRA ownership. As long as the child has legitimate compensation, a parent or guardian can open and manage a Roth IRA on their behalf.
The contribution limit for 2026 is $7,500 or the child’s total earned income for the year, whichever is less.2Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 A teenager who earned $3,000 from a summer job can contribute up to $3,000. The income needs to be real and documented. Babysitting, lawn care, and part-time retail work all count, but the wages need to reflect a reasonable going rate for the work performed.
The advantage of starting this young is compounding. Contributions are made with after-tax dollars, but future growth and qualified withdrawals are tax-free. A 16-year-old who contributes a few thousand dollars has nearly five decades of tax-free compounding ahead of them.
Tax Rules That Apply to a Minor’s Investments
Investment income earned by minors is subject to rules designed to prevent parents from sheltering money in their children’s lower tax brackets.
For 2026, a dependent child’s unearned income (dividends, interest, and capital gains) above $2,700 is taxed at the parent’s marginal rate rather than the child’s rate.3Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income The first portion of unearned income is offset by the child’s standard deduction, the next portion is taxed at the child’s own rate (usually 10%), and only the amount over $2,700 jumps to the parent’s rate. This applies to dependents under 19, or under 24 if they’re full-time students.
In practice, a custodial account generating a few hundred dollars in annual dividends won’t create a meaningful tax bill. But an account holding $50,000 in stocks producing $4,000 in yearly dividends will owe taxes at the parent’s rate on the amount above $2,700. Any dependent child with unearned income over that threshold must file a tax return.3Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income
What You’ll Need to Open the Account
Federal regulations require broker-dealers to verify your identity before activating any trading account.4eCFR. 31 CFR 1023.220 – Customer Identification Programs for Broker-Dealers At minimum, you’ll provide:
- Full legal name and date of birth
- A residential address; a P.O. box alone won’t suffice
- A taxpayer identification number: a Social Security number for U.S. citizens, or an Individual Taxpayer Identification Number (ITIN) for non-citizens who don’t qualify for an SSN
- A government-issued photo ID, such as an unexpired driver’s license or passport
Non-citizens who need an ITIN can apply using IRS Form W-7.5Internal Revenue Service. U.S. Taxpayer Identification Number Requirement
Beyond identity verification, brokerages collect your employment information, annual income, net worth, and investment experience. FINRA rules require firms to understand your financial situation before recommending investment products, so they need enough information to assess whether a particular security or strategy is appropriate for you.6FINRA. FINRA Rule 2111 – Suitability
To fund the account, you’ll link a bank account by providing your account number and routing number. Most platforms verify the connection within one to three business days.
How Much Money You Need to Start
The financial barrier to stock investing has largely disappeared for basic accounts. Most major online brokerages charge no account opening fees and set no minimum deposit. Fractional share trading lets you buy a slice of any stock for as little as $1, so you don’t need hundreds of dollars to own a piece of a company whose shares trade at $200 each.
Certain account types still carry meaningful minimums. Margin accounts, which let you borrow money to buy securities, require you to deposit at least 50% of the purchase price of any stock you buy on margin under Federal Reserve Regulation T.7FINRA. Margin Regulation And if you make four or more day trades within five business days in a margin account, you’ll be classified as a pattern day trader and must maintain at least $25,000 in equity at all times.8FINRA. Day Trading Even accidentally crossing the threshold locks your account until the balance is met.