About the Kids Investment Account Calculator
A custodial account (UTMA or UGMA in the US) lets a parent, grandparent or other adult invest money that legally belongs to a child. The adult manages it as custodian until the child reaches the transfer age set by state law — usually 18 or 21, and up to 25 in some states — when the child gains full control. This calculator projects the balance on that date from a starting deposit, regular monthly contributions and an expected return.
It is useful for parents deciding how much to set aside each month, grandparents planning gifts, and anyone comparing a custodial account with a 529 plan or simply investing in their own name. The chart splits the balance into what you put in and what compounding added, and the inflation-adjusted figure shows what the money would buy in today’s dollars.
Returns are assumed to compound monthly with contributions at the end of each month. Taxes on the account’s investment income (the “kiddie tax” rules) and fund fees are not deducted, so treat the result as a pre-tax, pre-fee estimate.
With the default inputs, the balance at transfer age is $71,633.23. Change any value above to recalculate instantly.
How to use the kids investment account calculator
- 1Enter the starting deposit and how much you will add each month.
- 2Enter the child’s current age and the transfer age that applies in your state.
- 3Choose an expected annual return (lower for a conservative mix).
- 4Read the projected balance, contributions and growth, and the value in today’s dollars.
Formula and method
The projection is a standard compound growth calculation. The initial deposit P grows for n months at the monthly rate i, and each monthly contribution C is added at the end of the month and compounds for the months remaining. The number of months is the gap between the child’s current age and the transfer age, times 12.
Contributions are the initial deposit plus every monthly deposit; growth is the balance minus contributions. The inflation-adjusted value divides the balance by (1 + inflation)^years to express it in today’s purchasing power. Taxes and fees are ignored.
- P
- Initial deposit
- C
- Monthly contribution
- r
- Expected annual return
- n
- Months until the transfer age
Worked examples
$2,000 plus $150 a month from age 3 to 21
Over 18 years you contribute $34,400. At 7% a year, compounding monthly, the account grows to about $71,633 by age 21 — more than half of it investment growth. In today’s dollars, at 2.5% inflation, that is worth about $45,929.
Starting at birth, $250 a month to 18
A $5,000 gift at birth plus $250 a month for 18 years totals $59,000 of contributions. At 6% the account reaches about $111,522 by the child’s 18th birthday.
Grandparent gifts $100 a month from age 10 to 25
Fifteen years of $100 monthly gifts is $18,000. At 8% it grows to about $34,604 by age 25, worth around $22,211 in today’s money at 3% inflation.
Frequently asked questions
What is a custodial account?+
A custodial account under the Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) holds assets owned by a minor and managed by an adult custodian until the child reaches the state’s transfer age.
At what age does a child get control of a UTMA account?+
It depends on the state and sometimes on how the account was set up — typically 18 or 21, and up to 25 in a few states. At that age the child legally controls the money and can spend it on anything.
How is a custodial account taxed?+
Investment income belongs to the child. A small amount of unearned income is tax-free and the next slice is taxed at the child’s rate, but above that the “kiddie tax” taxes it at the parent’s rate. See IRS Topic 553 for the current thresholds.
Custodial account or 529 plan?+
A 529 grows tax-free for qualified education costs and stays under the parent’s control, and it usually hurts financial aid less. A custodial account can be used for anything that benefits the child, but gifts are irrevocable and taxable income is not sheltered.
How much can I put into a custodial account?+
There is no contribution limit, but gifts above the annual gift tax exclusion — $19,000 per donor per child for 2025 and 2026 — need a gift tax return. Actual gift tax is only owed after using the lifetime exemption.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.