When you invest in stocks, an early start can make all the difference. Now, Fidelity is helping youngsters get a big jump on building their portfolios.
On Tuesday, the financial services corporation rolled out the Fidelity Youth Account, which is aimed at kids between the ages of 13 and 17.
Fidelity says it is “the industry’s first brokerage account designed exclusively for 13- to 17-year-old teens to save, spend and begin investing.”
The new youth account allows teens to buy and sell U.S. stocks, Fidelity mutual funds and many exchange-traded funds, or ETFs. Parents and guardians are able to monitor their teen’s account activity.
Teens also can save and spend with a Fidelity Youth Account, including managing a debit card for which domestic ATM fees are reimbursed.
The account also includes an educational component. Fidelity offers in-app education modules and articles on the Youth Account overview page. Articles focus on topics such as investing basics for teens, and tips for parents to help them model good money behavior.
When the child turns 18, the Fidelity Youth Account automatically converts to a full-fledged standard brokerage account, allowing more investment options for the account holder.
In a press release, Jennifer Samalis, senior vice president of acquisition and loyalty at Fidelity Investments, says:
“Importantly, our goal for the Fidelity Youth Account is to encourage young Americans to learn through action and foster meaningful family conversations around financial topics. Designed alongside teens and parents, the account is charting a new course by providing the ability for teens to build healthy money habits through learning by doing.”
Getting an early start in investing can make a big difference to your lifetime net worth because it allows more time for returns to compound.
For example, someone who begins investing $2,000 a year at age 25 and earns 7% per year would have more than $400,000 at age 65.
However, starting those contributions at age 13 — just 12 years earlier — would leave you around $1 million at age 65.
For more on getting started with investments, check out “The 6 Best Investing Apps for Beginners.”