What is a UGMA/UTMA account?

Good question. The Acorns Early Invest account is a UGMA/UTMA account, so let’s dive into what exactly that means…

• UGMA/UTMA stands for Uniform Gift/Transfer to Minors Act. 
• These types of investment accounts allow custodians to invest on behalf of beneficiaries.
• Custodians refer to any eligible adult relative or friend who wants to invest for the child. This may be the parents, but does not have to be.
• Beneficiaries in this case refer to minors, or the child or children who stand to benefit from the UTMA/UGMA.
• Funds in a UGMA/UTMA account are meant to be used for anything that benefits the child, from education to housing or travel.  
• Because the funds in a UGMA/UTMA are intended for the child, potential earnings are taxed at the child’s typically lower tax rate. These savings can be significant.
• Once the beneficiary reaches what’s called the “age of transfer,” they may access the funds. The age of transfer is typically between 18-25 years old.

We built Acorns Early Invest to make it easy for any family to invest for the next generation, with flexibility, and education along the way. 

Explore Acorns Early Invest, and learn more about UGMA/UTMA accounts here.

We’re excited to help you and your loved ones grow your oak!