What Age to Trade Stocks: Your Complete Guide to Teen Investing

When it comes to starting your investment journey, timing is everything. The age to trade stocks legally differs depending on your situation, but understanding your options can put you ahead of the game. Whether you’re a teenager eager to grow your wealth or a parent looking to teach financial literacy, knowing how age affects your ability to invest—and what accounts make sense at different ages—is critical.

The truth is simple: starting young creates a massive advantage. Every year you delay costs you real money in compounding returns. So let’s break down exactly when and how you can begin trading stocks, what accounts work at different ages, and which investment strategies make the most sense for young traders.

Why the Age You Start Trading Stocks Really Matters

The math is undeniable. If you put $1,000 into an investment account earning 7% annually at age 15, by age 65 you’d have roughly $435,000. Wait until age 25 to start? You’d only accumulate about $147,000. That ten-year gap costs you nearly $300,000 in lost compound growth.

This is why starting young to trade stocks—even with small amounts—sets up winners. Young investors have something adults don’t: decades of market cycles working in their favor. When the market dips, you don’t panic and sell. You have time to recover.

Beyond the numbers, early traders develop financial discipline and investment knowledge that serve them for life. You learn how companies work, what drives stock prices, and how to make informed decisions. These aren’t lessons you forget.

The Legal Age to Trade Stocks: What You Need to Know

Here’s the direct answer: you must be at least 18 years old to open an individual brokerage account and make all your trading decisions independently. This is the age when brokers will let you go solo—no permission slips required.

But here’s the good news: being under 18 doesn’t mean you can’t trade stocks. It just means you need an adult partner (parent, guardian, or trusted family member) to help set things up. Several account structures allow minors to start trading stocks right now.

Account Types That Let You Trade Stocks as a Minor

Not all investment accounts are created equal. The differences matter because they affect who controls the money, who makes trading decisions, and what tax benefits you get.

Joint Brokerage Accounts: Trading With Equal Say

A joint brokerage account lets two or more people own the account together. In this setup, both the minor and the adult are co-owners. The huge advantage here? You can have real input on trading decisions, or even make them yourself with adult oversight.

The adult co-owner pays taxes on any capital gains from the account. But here’s the flexibility: an adult could open a joint account when you’re young, make all trades during childhood, then gradually hand over more trading control as you mature. It’s customizable.

Most brokers today offer joint accounts. Many investing apps designed for younger traders specifically support them.

Fidelity Youth™ Account stands out as a leading option. Teens aged 13-17 can open this joint account through their parents. You can buy most U.S. stocks, ETFs, and Fidelity mutual funds starting at just $1. The account has zero commissions on stock trades, no monthly fees, and no account minimums. You also get a free debit card with no ATM fees at 55,000+ nationwide ATMs.

Beyond trading, the account includes a Learn tab with educational content and rewards for completing lessons. Parents get monitoring tools, transaction alerts, and can review all activity. It’s designed specifically for younger traders who want real investing experience.

Custodial Accounts: Adult Control, Minor Ownership

Here’s the key distinction: in a custodial account, the minor owns the investments, but the adult makes all trading decisions.

The adult (custodian) opens and manages the account. They decide what to buy, when to sell, and how to trade. The minor owns everything inside—the cash and investments—but has no say in trading choices. However, many custodians discuss decisions with young traders to teach them.

At the “age of majority” (usually 18 or 21, depending on your state), control transfers to you. You gain full access and can make all your own trading decisions.

Custodial accounts come in two flavors:

UGMA (Uniform Gifts to Minors Act) accounts hold financial assets only: stocks, bonds, ETFs, mutual funds, and insurance products. All 50 states recognize UGMA structures.

UTMA (Uniform Transfers to Minors Act) accounts are broader. They hold financial assets plus real property like real estate or vehicles. Only 48 states have adopted UTMA (South Carolina and Vermont don’t), but where available, UTMA offers more flexibility.

Both UGMA and UTMA typically prohibit higher-risk trades like options, futures, or margin trading. The restrictions exist to protect young traders from losing money on complex strategies.

Acorns Early offers custodial accounts through its Premium subscription ($9/month). The app uses “Round-Ups” to invest spare change—if you spend $2.60, it rounds to $3.00 and invests the 40-cent difference. This makes consistent investing painless. Premium subscribers also get access to Roth IRAs, custom portfolios with individual stocks, and educational content.

Custodial Roth IRAs: Tax-Free Growth for Working Teens

If you’ve earned income (summer job, babysitting, freelance work), you qualify for a custodial Roth IRA. In 2026, you can contribute up to $7,000 per year (or your total earned income, whichever is less) to build retirement savings.

Here’s why this matters: A Roth IRA is powerful for young traders. You contribute money you’ve already paid taxes on (after-tax dollars), but then everything grows tax-free. When you withdraw in retirement, there are zero taxes. Meanwhile, your money compounds for 40-50+ years without touching it.

Compare this to a Traditional IRA, where you contribute pre-tax dollars and pay taxes when you withdraw during retirement. For a teen earning little and paying minimal taxes, a Roth locks in low tax rates now.

E*TRADE’s IRA for Minors lets you open traditional or Roth custodial IRAs if you have earned income. You can build portfolios with thousands of stocks, bonds, ETFs, and mutual funds. E*TRADE offers zero-commission stock and ETF trading, plus $0-commission mutual fund trades. The platform also provides extensive educational resources—articles, videos, webinars, and live events.

What Investments Make Sense When You’re Young?

Your timeline is your advantage. At 15 or 16, you can afford to take more risk because you have 50 years to recover from market downturns. This changes what you should own.

Individual Stocks

Buying individual stocks means owning a piece of a real company. When the company thrives, your stake grows. The risk: if the company underperforms, your holding declines.

The educational value is huge. You research companies, follow them in the news, discuss them with friends. You’re not passively hoping money appears—you’re actively learning.

Mutual Funds

A mutual fund pools money from many investors to buy dozens, hundreds, or thousands of investments simultaneously. If you invest $1,000 in a single stock and it crashes, you’ve lost $1,000. But if that $1,000 sits in a mutual fund holding 1,000 different stocks, and one crashes, the impact is minimal.

The tradeoff: mutual funds charge annual fees (sometimes substantial). Shop around to ensure you’re not overpaying for performance.

Exchange-Traded Funds (ETFs)

ETFs resemble mutual funds but trade like stocks throughout the day (mutual funds settle once daily after market close). Most ETFs are “passively managed,” meaning they track an index instead of relying on human managers to pick winners.

Index funds—which track market indices by holding all included stocks—typically beat actively managed funds while costing less. For young traders starting with $1,000 and wanting broad diversification, ETFs are ideal.

Tax Advantages: Why Custodial Accounts Win

Beyond just starting young to trade stocks, the type of account matters for taxes.

Joint brokerage accounts offer no tax shelter. Any gains get taxed at your (or your parents’) rate.

Custodial accounts and Roth IRAs provide tax benefits. In UGMA and UTMA accounts, minor traders pay zero tax on the first ~$1,450 of annual unearned income (2026 figures), reduced rates on the next $1,450, and only face full taxation beyond that.

Roth IRAs are even better: zero taxes on growth and withdrawals in retirement.

529 Plans and Education Savings Accounts (ESA) offer tax-free growth for education expenses specifically. If you know college is coming, these accounts shield your money from taxation.

Making Compounding Work for You

Here’s a real-world example: Invest $2,000 annually into a Roth IRA from age 16 to 23 (eight years). Stop adding money after 23. By 65, assuming 7% annual returns, you’d have over $570,000.

The power? You only invested $16,000 of your own money, but compound growth did the heavy lifting. Every dollar earned creates new earnings, accelerating your wealth.

Someone who starts at 25 and invests the same $2,000 annually until 65 (40 years) ends up with less—roughly $540,000—because they missed those crucial early years.

That’s the math behind why starting young to trade stocks matters so much.

Building Wealth Habits That Last a Lifetime

Investing isn’t something you do once and forget. It’s a habit—one that fits into your monthly budget alongside rent, groceries, and entertainment.

Young traders who build consistent investing habits early develop financial discipline that compounds alongside their money. You learn that markets cycle, that downturns are normal, and that patience wins. These lessons stick with you.

As your financial situation changes—you earn more some years, less others—you adjust your contributions. If you start adjusting at 18, you’re already ahead of peers who don’t begin until 30.

When You Turn 18: Managing Your Own Accounts

At 18, you gain access to standard individual brokerage accounts. You can open accounts directly with brokers like E*TRADE, Fidelity, or Acorns without parental consent. You control all trading decisions.

Many brokers offer educational resources for new adult traders. Fidelity and E*TRADE both provide articles, calculators, and live sessions to support your transition to independent investing.

If you’ve been building wealth since age 15 through custodial accounts or joint accounts, turning 18 is a milestone—not a starting point. You’re already experienced.

The Minimum Age to Start: Wrap-Up

The minimum age to independently trade stocks is 18. But don’t wait until then.

Starting younger with custodial accounts, joint brokerage accounts, or custodial Roth IRAs puts compound growth to work for you. Even small amounts invested at 16 outpace larger amounts invested at 26.

The account type matters: joint accounts give you trading input, custodial accounts are custodian-controlled, and Roth IRAs offer tax-free growth if you have earned income.

The investments matter too. Young traders benefit from growth-focused approaches—individual stocks for learning, ETFs for diversification, or mutual funds for simplicity.

Most importantly, the age you decide to start matters more than anything else. Compound growth, tax advantages, and habit-building all work in your favor. Starting your journey to trade stocks at 15 or 16 puts you on a completely different wealth trajectory than starting at 25.

The question isn’t just “what age can I trade stocks?” It’s “when should I start?” The answer: as soon as you can.