Ask Kim
Where to Open Kid IRAs
I read your November 2003 article, "Make Your Children Millionaires," about how valuable it can be to open a Roth IRA for your children as soon as they have any earned income. But I have yet to find a broker or fund that would accommodate an investment or IRA for a minor. Do you know of any?
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
October 24, 2003
I read your November 2003 article, “Make Your Children Millionaires,” about how valuable it can be to open a Roth IRA for your children as soon as they have any earned income. But I have yet to find a broker or fund that would accommodate an investment or IRA for a minor. Do you know of any?
You’re right that it can be difficult to find a company that will let you open up a Roth IRA for your kids -- many are cautious because children can’t legally enter into binding contracts. But several mutual fund companies and brokerage firms will allow IRAs for kids as long as an adult co-signs the paperwork accepting legal responsibility for investing the child’s money.
When we surveyed firms a few months ago, mutual fund companies Baron, Invesco, Janus, Liberty, Strong, T. Rowe Price, USAA and Vanguard allowed parents to open up IRAs for their children. Brokers Merrill Lynch, Prudential, Smith Barney, Charles Schwab, TD Waterhouse and UBS PaineWebber allowed kid IRAs, too, as did several large banks like Chase and Citibank.
