As parents, we have a whole lot of responsibilities. Some are obvious—like feeding, clothing, and loving our kids. Others can feel abstract, like setting them up for success when they launch from our nest. Cue parental panic.
For a while, my husband and I didn't even think about how to manage our children's finances. There was so much on my plate that setting up an account and maintaining it regularly just seemed like one more chore I didn't need. But small expenses (like buying soccer uniforms) and big ones (like planning for college) add up quickly.
So when a neighbor, introduced us to Fabric by Gerber Life’s Investment Accounts for Kids, we set it up in 5 minutes, and boy are we thankful we found it! Here’s why:
So What Is the Hype Around the UGMA account?
A UGMA account is an investment account that parents can open on behalf of their children, and contribute to it until the child reaches adulthood (18 or 21, depending on the state).
When your kids are young, parents can make penalty-free withdrawals to use the money for anything that directly benefits your child. Once your kids reach adulthood, the account transfers to the child who can use the money without any restrictions. Think of it as a springboard to take risks (or play it safe if that’s what you prefer).
UGMAs are a bit more flexible than 529s and are primarily used for education, and they’re easier to set up than a trust. UGMAs cover “anything that directly benefits the minor,” into adulthood, translating to:
- Sports equipment
- First car
- Art supplies or classes
- College tuition and textbooks
- Weddings
- Baby expenses
And it’s so easy. Instead of having to choose an advisor, set up an in-person meeting, and fill out confusing paperwork, I can simply apply on Fabric’s website while sitting in the grocery store parking lot with my sleeping toddler.
The sign-up form walked me through the process, asking me to answer some personal questions about me and my children, share my goals to help determine my risk tolerance for the account, and then submit my funding details.
That was the best use of 10 minutes I can remember since having kids.
You can contribute as little as $1 per day
Start by setting up regular auto-contributions at a dollar amount that fits your budget. The minimum is just $20 per month, which you can increase or cancel anytime.
UGMA accounts are taxable, but the good thing is they’re generally taxed at the minor’s tax rate1. The first $1,250 of unearned income in the account is tax-free, and the next $1,250 is taxed at the child’s tax rate (likely 10%, the lowest rate).
Fabric's Reputable Partners
UGMA portfolios are managed by Fabric by Gerber Life's SEC-registered partner, Fort Washington Investment Advisors, with over 30 years of experience and $80+ billion under management2.
Fabric’s UGMA accounts are SIPC-insured up to $500,000. Plus, they use bank-level security, including 256-bit encryption and adaptive risk-assessment security to protect your private information.
Through UGMA accounts like the ones offered by Fabric, my parents—who were my earliest financial advisors—set me up for future financial success in my youth, and I love how easily I can do the same for my children.
The best gift you can give your kids? A UGMA account through Fabric
We all want our kids to live a rich and fulfilling life. Giving their finances a head start is a great way to do just that. Fabric helps give you peace of mind by making it easy for you to get started. There aren’t any in-person meetings, confusing paperwork, or expensive fees involved3.
Now, by making small monthly contributions to their UGMA accounts, I know I’m helping my children have the future financial security and freedom they need to succeed. Had I known how efficiently Fabric could help us prepare for our family’s future, I would’ve used it way sooner. It’s not too late—start saving for your kids’ tomorrow, today4.
Start the school year with $25 on us. Get ahead of the class with an investment account for your child.5
- Fabric by Gerber Life and its affiliates do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisory before engaging in any transaction. ↩︎
- As of [03/31/2024] ↩︎
- To see full disclosure, visit meetfabric.com/legal ↩︎
- This is a paid endorsement for Fabric by Gerber Life's UGMA (Uniform Gift For Minors Act) Offering and not a paid endorsement for advisory services."Fabric by Gerber Life is a brand of Western & Southern Financial Group, Inc. Western & Southern Financial Group, Inc. is the parent company of Fort Washington Investment Advisors, Inc.Investment advisory services tied to the Fabric by Gerber Life platform are provided by Fort Washington Investment Advisors, Inc., an SEC registered investment adviser. Registration as an investment advisor does not imply any level of skill or training. Custody, brokerage, and clearing services are provided by Apex Clearing Corporation, a registered broker-dealer and member FINRA/SIPC. As a member of the Securities Investor Protection Corporation (“SIPC”), funds are available to meet customer claims up to $500,000, including a maximum of $250,000 for cash claims. For additional information regarding SIPC coverage, including a brochure, contact SIPC at (202) 371‐8300 or visit www.sipc.org. Please consider your objectives before opening an investment account. Investments in securities involve the risk of loss. A diversified portfolio does not ensure a profit or protect against a loss. ↩︎
- terms and conditions apply. Visit https://hello.meetfabric.com/ugma-countdown-promo for details ↩︎
