The demographic of investors is about to get a whole lot younger: Fidelity Investments plans to launch a new investing and savings account for teenagers that will allow them to buy and sell stocks.
According to the Wall Street Journal, the investing firm is planning to launch the Fidelity Youth Account, which is an investing and savings account for those aged 13 to 17. The account, which does not charge a fee, will give teenagers the option to buy and sell stocks, various ETFs, as well as Fidelity mutual funds. Once the youth reaches the age of 18, the account will automatically transition into a standard brokerage account.
However, the accounts, which are set to be the first of their kind in the finance industry, will only be available to those teenagers whose parents also have a Fidelity account. In addition, the young account holders will not be able to trade options or make trades on the margin. “Our goal for the Fidelity Youth Account is to encourage young Americans to learn through action and foster meaningful family conversations around financial topics,” said Fidelity senior vice president of acquisition and loyalty Jennifer Samalis.
Over the past year, young individuals have flooded the stock market as the Covid-19 pandemic created new opportunities for retail investors. According to Fidelity, 1.6 million of the total 4.1 million new accounts created in the first quarter of this year were opened by those below the age of 35, marking an increase of 222% from the previous year.
Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.