Personal Finance
Personal Finance
Custodial Accounts (UGMA/UTMA)
A custodial account under the Uniform Gifts to Minor Act (UGMA) and Uniform Transfers to Minor Act (UTMA) is one way to save for your child's future higher education needs. Although not tax advantaged - earnings and withdrawals may be subject to your child's tax rate - custodial accounts allow you to contribute as much as you like and give you maximum control over investment choices and decisions.
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Plan At A Glance
Maximum Contributions
No limit 1

Required Income Level

No income restrictions
Age Limit of Beneficiary
Maximum age of 18 to 21 depending on applicable state law. Becomes property of beneficiary at age 18 or 21.
Tax Consequences

No federal deductions for contributions made

All income is taxed at federal and state levels (at child's tax rate)2
Penalty for Non-Qualified Withdrawals

Can make withdrawals at anytime and for any reason (not solely for education purposes) without penalty

Account Control

Account owner decides when withdrawals are made and for what purpose3,4

Account owner cannot change the designated beneficiary
Investment Control

Can customize portfolio in any way desired

Custodian manages account
  • Unlimited contributions
  • Anyone can open an account
  • No income restrictions
  • Complete freedom to choose investments
  • Complete freedom to make changes among investments
  • No penalties for withdrawals

1. Contributions qualify for the $12,000 annual gift tax exclusion.
2. With a few exceptions, beneficiary has no rights to the assets in the account until they turn 18 or 21.
3. Funds become property of beneficiary once the age of account termination is reached (18 or 21).

PNC Investments does not provide legal or tax advice. You should consult with your personal tax advisor for additional information.

Important Investor Information: Brokerage and insurance products are:

Securities and brokerage services are provided by PNC Investments LLC, a registered broker-dealer and investment adviser and member FINRA, and SIPC. Annuities and other insurance products are offered by PNC Insurance Services LLC, a licensed insurance agency.