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Purpose/Different Types of Custodial Accounts

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Question: 
What are the purposes of custodial accounts and what different types are there?
Answer: 

Custodian accounts are governed by state law and will vary by state. The statutes are generally titled either the Uniform Transfer to Minors Act (UTMA) or the Uniform Gift to Minors Act (UGMA). These statutes allow funds to be gifted to a minor, but controlled by a custodian who will manage the funds on the minor's behalf until they reach the statute defined age of majority. Most investment avenues are available to the custodian including savings accounts and CD's, as well as non-FDIC insurued investment options.

First published on BankersOnline.com 5/14/12

First published on 05/14/2012

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