what is a custodial account 
the term custodial account generally refers to a savings account at a financial institution mutual fund company or brokerage firm managed by one person for the benefit of another generally an adult controls a custodial account for a minor a person under the age of 18 or 21 years depending on the laws of the state of residence approval from the custodian is mandatory for the account to conduct transactions such as buying or selling securities in a broader sense a custodial account can mean any account maintained by a fiduciarily responsible party on behalf of a beneficiary such as an employer based retirement account handled for eligible employees by a plan administrator a fiduciary is bound ethically and legally to act on the best behalf of another s interests each state has specific regulations governing the age of majority and the naming of custodians and alternative custodians investopedia mira norian