Moving UTMA Funds from Savings Account to Brokerage

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wannabeinvestor
Posts: 19
Joined: Mon Aug 15, 2022 10:20 am

Moving UTMA Funds from Savings Account to Brokerage

Post by wannabeinvestor »

When my two children were born (now ages 7 and 10) we opened bank accounts for them at a brick and mortar bank that are UTMA/UGMA savings accounts. At the time I didn't really understand the UTMA process and stipulations so we had been putting money into that account for a few years before realizing that there were some better options to help save for college.

Since then I have opened a regular 529 account (non-custodial) for each child and have been contributing to that regularly. I'd also like to move the UTMA funds into something non-cash. I don't really want to open a UTMA-529 with those funds since I already have regular 529s with them as the beneficiaries so I'd like to invest the UTMA money in just a regular brokerage account so I can start to teach them about investing and that should provide some funds to them to use to get a head start during/after college.

I do most of my investing at Merrill Edge (bank is Bank of America and I do that for the Preferred Rewards perks) but I see no reason to keep the kids UTMA accounts there, so I was thinking about opening a Fidelity Custodial account.

Does anyone have any experience with something like this before? I want to make sure that I can connect the Fidelity Custodial account to the UTMA savings account and transfer the money directly without having it "change" owner from the child. From there I'd also probably like to close the savings account because I won't have a need for it but I haven't really found any regulations around whether you can close a UTMA account before the child becomes of age or not.
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