Custodial Account Growth Calculator
Project how a UTMA or UGMA custodial account grows from an initial deposit and steady monthly investing until the child comes of age.
How it works
FV = initial × (1+r)^n + monthly × ((1+r)^n − 1) ÷ r · n = years × 12 · r = annual return ÷ 12
A custodial account (UTMA or UGMA) holds investments for a minor under an adult custodian until the child reaches the age of majority, at which point the assets become legally theirs. Because the money can stay invested for many years, the growth portion often ends up larger than everything you deposited. Note that earnings above a threshold can be taxed at the parents’ rate under the "kiddie tax," and the balance counts as the child’s asset for financial aid.
Worked example
A $1,000 opening deposit with $100 invested monthly for 18 years at 7% grows to roughly $47,000. You put in about $22,600, and the remaining ~$24,000 is compounding.
Frequently asked questions
What is the difference between UTMA and UGMA?
Both are custodial accounts for minors. UGMA holds financial assets like cash, stocks and funds; UTMA can also hold other property such as real estate. UTMA also often allows a later transfer age. Availability depends on your state.
Who pays tax on a custodial account?
The child is the owner, so investment income is reported under the child. A portion is tax-free, the next portion is taxed at the child’s rate, and earnings above the annual "kiddie tax" threshold are taxed at the parents’ rate.
Can I take the money back out?
No. Contributions to a custodial account are irrevocable gifts to the child and must be used for the child’s benefit, with full control passing to them at the age of majority.
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Educational estimate, not financial advice. Investment returns are not guaranteed.