Custodial account

So imagine that you have a piggy bank where you put all your saved allowance or money that your parents gave you. You are the owner of your piggy bank, right? Now, a custodial account is kind of like a big people's version of a piggy bank.

In a custodial account, a grown-up like your mom or dad sets up an account for you and puts money in it. You are still the owner of the account just like you are the owner of your piggy bank. But the grown-up, who is called the custodian, manages the account and makes sure the money is being saved or invested wisely until you are old enough to take over.

When you turn a certain age, usually 18 or 21 depending on where you live, the money in the custodial account becomes yours and you can use it however you want. But until then, the custodian is in charge of it and helps you make smart financial decisions.

So that's what a custodial account is, a grown-up managed piggy bank that helps you save and invest money for your future.