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Lesson 87 · Written for kid, teen, and little

A brokerage account

The account you open to start buying real stocks.

The idea

A brokerage account is one common way to buy real stocks — think of it as an account built for investing. The broker carries out your trades, holds and records your shares, and handles dividends and tax forms. If you are under 18, an adult can help open a custodial account. You own its assets, but control passes at the age set by your state's law and the transfer terms, which is not always 18. Schwab, Fidelity and Vanguard are examples of brokers; compare their fees, account rules and protections with an adult. 🏦

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Words to know

6

Brokerage account

An account built for buying and holding stocks and funds.

Custodial account (UTMA/UGMA)

An account an adult manages for a minor. When control transfers depends on the account and applicable state law.

Fractional shares

Buying a small slice of a share, so you can invest even just a few dollars.

Index fund

A fund designed to follow an index. Its holdings depend on that index; a broad stock index fund can spread money across many companies.

Roth IRA

A retirement account with contribution rules and special tax treatment. Qualified withdrawals can be tax-free; eligibility and withdrawal conditions apply.

1099

A tax form your brokerage sends showing your gains and dividends for the year.

Try it — no accountMatch the pairs

Match each thing a brokerage does to its name.

0 / 5 matched

In the full lesson

  1. 1Match the pairs

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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