Vanguard UGMA/UTMA account 


Custodial accounts under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) allow you to save on behalf of a child for education or any other purpose that benefits the child (other than parental obligations such as food, clothing, and shelter).

Key benefits of an UGMA/UTMA

  • You can contribute as much as you want, but amounts above $14,000 per year ($28,000 for a married couple filing jointly) will incur federal gift tax.
  • Anyone can open or contribute on behalf of a child.
  • There is no penalty if account assets aren't used for college.
UGMA/UTMAs at a glance

Points to consider

  • These are custodial accounts with assets held in the child's name, so contributions are irrevocable.
  • Upon reaching the age of majority, the beneficiary can use the assets for any purpose—educational or otherwise.
  • There is a significant impact on federal financial aid. The account is treated as the child's asset and weighed more heavily in financial aid calculations.
  • You can't change beneficiaries.
  • Contributions aren't tax-deductible.
  • Earnings are subject to federal income or capital gains tax.

A Vanguard UGMA/UTMA offers you more

  • A broad lineup of Vanguard mutual funds.
  • Among the lowest expense ratios in the industry.
  • No enrollment, transfer, or advisor fees.
  • Custom scheduling to electronically move money between your bank account or other Vanguard accounts and your UGMA/UTMA.

Tip: You can redeem an UGMA/UTMA held at another company and contribute the assets to a Vanguard UGMA/UTMA or Vanguard 529 Plan account. Note that such a transfer may be a taxable event.


All investments are subject to risk.  


Invest now

Open a Vanguard UGMA/UTMA
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