Compare College Savings Plans > Custodial Accounts (UGMA/UTMA)

Invest on behalf of a minor for any future expense

A custodial account, also known as Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA), gives you the flexibility to set aside money to pay for education or any expense that benefits a child. All funds in the account are considered a permanent gift that becomes the child’s assets once they reach vesting age.
May be a good move for...
  • Ability to use funds for any beneficiary expense
  • Enjoying the flexibility of a cash management account
  • Accessing a full range of investment choices
  • Making contributions up to annual gift tax limits2
 
Tab One

Simplify investing for a child's future

With access to a full range of investments, simple flat-rate pricing and one-on-one guidance when you need it, Merrill Edge® can help you invest for a child's future. Plus, we offer a streamlined investing experience that combines the investing insights of Merrill Lynch with the convenience of Bank of America banking.
Looking for one-on-one advice?
Meet with a licensed Merrill Edge Financial Solutions Advisor™ in person or on the phone, who will help you pursue your financial goals and plan for what matters most to you.
Tab Two

Why a custodial account may be right for you

The Uniform Gift to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) are custodial accounts that allow you to invest in a college education or any other expense that benefits a child. Funds in the account are considered an irrevocable gift that becomes a child's assets once they reach vesting age.
 
What are the benefits of a custodial account?
  • Funds can be used for any purpose as long as it benefits a child (no penalty if the assets aren't used for college)
  • You can pass money to a child once they reach the vesting age
  • Can be funded with cash or securities
  • Anyone can contribute on behalf of a child
What are the tax advantages of a custodial account?

In 2015, the first $1,050 of a child's income generally is tax-exempt, the next $1,050 of unearned income generally is taxed at the child's tax rate, and unearned income over $2,100 generally is taxed at the parent's tax rate if the child is under age 19 (or is a full-time student under age 24) at the end of the year.

What are the investment choices for a custodial account?

Access a full range of investments choices, including: stocks, exchange-traded funds (ETFs), bonds and thousands of well-known mutual funds.

Who controls a custodial account?

The account is owned by a custodian until the child inherits the assets upon vesting age. Beneficiaries cannot be changed because contributions into the account are considered an irrevocable gift.

How much can I contribute to a custodial account?

There's no limit to the amount you can contribute. And there's no age limit for making contributions and withdrawals, but account ownership will be transferred to the minor upon vesting age. You can contribute up to the annual gifting limits of $14,000 (or $28,000 for couples) annually gift tax-free.

Can anyone else contribute to a custodial account?

Anyone can contribute to a custodial account, including family members and friends.

How will this account type impact financial aid?

Custodial accounts are treated as a child's asset and can reduce their ability to get financial aid. The impact is less favorable than that of assets held in a Section 529 or Coverdell Education Savings Account.

 
Looking for one-on-one advice?
Meet with a licensed Merrill Edge Financial Solutions Advisor™ in person or on the phone, who will help you pursue your financial goals and plan for what matters most to you.
Tab Three

Three steps to get started with your Merrill Edge custodial account

1

Open your account

It takes just minutes to open your account online. Here's what you'll need.

If you need help, give us a call at 1.888.637.3343—24 hours a day, 7 days a week.

 
2

Fund your account

Fund your account instantly in real time from your eligible linked Bank of America bank account. Or, transfer funds to your account by check, by wire transfer, or by transferring or rolling over an existing account.4
Learn how to fund your account.

 
3

Start investing

Create an investment strategy
Become a smarter investor with help from our investor education. You'll learn how to make a plan and build a balanced portfolio aligned to your investing goals.

Find the right investments
Start with BofA Merrill Lynch US 1 List, Merrill Edge Select® Funds and Merrill Edge Select® ETFs. Then, narrow your investment choices with powerful screening tools and make informed investment decisions with access to independent research.

Manage your portfolio
Access your new Merrill Edge investment account anytime, anywhere—online, on your mobile device and at thousands of Bank of America ATMs.

 
Looking for one-on-one advice?
Meet with a licensed Merrill Edge Financial Solutions Advisor™ in person or on the phone, who will help you pursue your financial goals and plan for what matters most to you.
Tab Four
Merrill Edge offers simple, flat-rate pricing of $6.95 per unlimited online equity and ETF trade1—that's lower standard pricing than Fidelity, TD Ameritrade and E*TRADE.5

Simple flat-rate pricing

 
6.95 stock and ETF trades
per unlimited online equity & ETF trades.1
No trade or balance minimums
Learn how to qualify for $0 trades6  See fee details
Our everyday price comparison5
E Trade 

logo
$9.99
TD Ameritrade logo
$9.99
Charles Schwab logo
$6.95
Fidelity logo
$7.95

Brokerage account fees

Annual account fee
$0
Minimum funding requirement
$0
Additional transaction, service and investment fees.
Looking for one-on-one advice?
Meet with a licensed Merrill Edge Financial Solutions Advisor™ in person or on the phone, who will help you pursue your financial goals and plan for what matters most to you.
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Open an account
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600 dollar IRA offer
Get up to $600 when you enroll, open and fund a new Merrill Edge® investment account or IRA.
How to qualify
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BofA Merrill Lynch Global Research is equity research produced by Merrill Lynch, Pierce, Fenner & Smith incorporated and/or one or more of its non-U.S. affiliates.

Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

1 Other management and transaction fees may apply. In addition to your stock, ETF or option commission sell orders may also be subject to a transaction fee (of between $0.01 to $0.03 per $1,000 of principal). If applicable, this fee appears under "Transaction Fee" on a Trade Confirmation. There are other fees associated with investing in ETFs, Read the "Expenses & Charges" sections of the prospectus to find out what they are. Contact us to obtain a prospectus.

2 For 2015, contributions can be made up to the federal gift-tax exclusion limit of $14,000 per beneficiary per year ($28,000 for married couples) without incurring federal gift taxes or generation-skipping transfer tax. Although, under the Internal Revenue Service five-year gift rule, you can take advantage of a forward gifting provision that allows you to contribute up to $70,000 ($140,000 for married couples filing jointly) per beneficiary in a single year without incurring gift tax. Contributions between $14,000 and $70,000 ($28,000 and $140,000 for married couples filing jointly) made in one year can be prorated over a five-year period without subjecting you to gift tax or reducing your federal unified estate and gift tax credit. If you contribute less than the $70,000 ($140,000 for married couples filing jointly) maximum, additional contributions can be made without you being subject to federal gift tax, up to a prorated level of $14,000 ($28,000 for married couples filing jointly) per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution. For contributions between $14,000 and $70,000 ($28,000 and $140,000 for married couples filing jointly) made in one year, if the account owner dies before the end of the five-year period, a prorated portion of the contribution may be included in his or her estate for estate tax purposes. Please consult your tax and/or legal advisor for such guidance.

3 Merrill Edge Roadmap® participation requires a Merrill Edge Advisory Center™ account.

4 You have choices for what to do with your employer sponsored retirement plan. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth, roll over to an employer sponsored plan from a prior employer to an employer sponsored plan at your new employer, take a distribution or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment and provide different protection from creditors and legal judgments. These are complex choices and should be considered with care. Visit http://www.merrilledge.com/retirement/rollover-ira or call a Merrill Edge rollover specialist at 1.888.637.3343 for additional information about your choices.

5 Fidelity's standard online price is $7.95 per equity or ETF trade (excluding certain iShares and Fidelity ETFs offered commission-free). Schwab's standard online price is $6.95 per equity or ETF trade (excluding ETFs available through Schwab ETF OneSource™ when placed in a Schwab account that are available commission-free). E*TRADE's standard online price for equity, ETF or option trade is $9.99, $7.99 for customers who trade at least 150 times per quarter, $6.99 for customers who trade 1,500+ times per quarter. TD Ameritrade's standard online price is $9.99 per equity or ETF trade. Note: Competitive comparison pricing information as of 02/02/2017 excludes special promotional offerings and sales of fractional shares.

6 $0 trades are only available with an individual or joint Merrill Edge self-directed brokerage account. When placing a trade, Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) determines whether you meet the balance or relationship requirements to qualify that trade for the $0 waiver. To determine the number of qualifying trades, MLPF&S adds the qualifying trades in your individual accounts and joint accounts. Commission fees apply when qualification requirements are not met, or when you exceed the number of qualifying trades a month.

Brokerage fees associated with, but not limited to, margin transactions, option trading, special stock registration/gifting, account transfer and processing, research request and termination apply.

a) Commissions are waived for 30 online equity trades each month including stock and exchange traded funds (ETFs) on behalf of MLPF&S, for customers who meet any one of the following criteria:
i) Combined total of $25,000 or more in your deposit accounts at Bank of America, N.A. MLPF&S adds the average collected balances in your deposit accounts as of the prior month to the balances in your bank CD and IRAs as of the prior business day. Bank deposit accounts with the same Social Security number (SSN) as the SSN(s) on the self-directed brokerage account are systematically included in the balance determination. Standard deposit account fees apply.
ii) Or combined balance of $25,000 or more in cash balances in one or more of the following sweep options in your Merrill Edge self-directed account(s) as of the prior business day:

- Bank Deposit Accounts sweep option with your Cash Management Account® (CMA®)
- Retirement Assets Savings Program sweep with your IRA
iii) Or Client of U.S. Trust
iv) Or Client of Preferred Rewards Platinum
b) Commissions are waived for 100 online equity trades each month including stock and ETFs on behalf of MLPF&S, for customers who meet any one of the following criteria:
i) A Client of Preferred Rewards Platinum Honors
ii) Or Client of Banking Rewards Wealth Management U.S. Trust

This offer does not apply to Business/Corporate Accounts, Investment Club Accounts, Partnership Accounts and certain fiduciary accounts held at MLPF&S. Other fees and restrictions may apply. Relationship requirements and pricing are subject to change and/or termination without advance notice. To learn about additional ways to qualify for $0 trades, call 1.888.MER.EDGE (1.888.637.3343).

You are eligible to enroll in the Preferred Rewards program if you have an active, eligible Bank of America personal checking account and maintain a three month average combined balance in your qualifying Bank of America deposit accounts and/or your qualifying Merrill Edge and Merrill Lynch investment accounts of at least $20,000 for the Gold tier, $50,000 for the Platinum tier, or $100,000 for the Platinum Honors tier. SafeBalance Banking accounts do not count towards the account or balance requirements, and do not receive the fee waivers and other benefits of the program. Certain benefits are also available without enrolling in Preferred Rewards if you satisfy balance and other requirements. For details on Employee qualification requirements, please visit the Employee Banking & Investments website. The Preferred Rewards Gold tier does not include the $0 online equity and ETF trades via Merrill Edge®, a benefit that is currently available at the Platinum and Platinum Honors tiers of Preferred Rewards. Merrill Lynch Wealth Management clients with greater than $250,000 in assets with Bank of America and Merrill Lynch are eligible for additional banking benefits. Please speak with your Merrill Lynch financial advisor for details.

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