Fidelity launches first commission-free brokerage account for 13- to 17-year-olds

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NEW YORK — Constancy Investments on Tuesday launched a commission-free brokerage account for 13- to 17-year-olds that lets them commerce shares on a cell app, in addition to save and spend utilizing a debit card, in an effort to seize the subsequent technology of buyers.

People have flooded into the market since October 2019 when giant brokers like Constancy and Charles Schwab Corp dropped their buying and selling commissions, following fast-growing startups like Robinhood and Social Finance Inc (SoFi) which have courted younger grownup merchants.

Boston-based Constancy stated its Constancy Youth Account is the primary brokerage account designed completely for teenagers.

“Importantly, our aim for the Constancy Youth Account is to encourage younger Individuals to be taught by way of motion and foster significant household conversations round monetary subjects,” stated Jennifer Samalis, Constancy’s senior vp of acquisition and loyalty.

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The youth accounts can be found to teenagers whose mother and father or guardians – who can monitor the accounts – are Constancy clients.

Teenagers can entry Constancy’s academic instruments, and should purchase and promote home shares, together with by way of fractional shares, which lets them purchase slices of shares for as little as $1, in addition to most exchange-traded funds, and Constancy mutual funds, by way of the accounts.

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When the investor turns 18, the account transitions to a regular brokerage account that comes with extra alternative and suppleness, Constancy stated.

The brand new youth accounts have been examined by kids of Constancy workers who volunteered them for a pilot program beginning in mid-2020, with 759 accounts opened by the top April.

Constancy stated earlier this month that buyers opened 4.1 million new brokerage accounts within the first quarter, up 156.3 per cent in contrast with the identical interval final 12 months. Round 1.6 million of these new accounts have been opened by individuals 35-years-old or youthful, a rise of 222.8 per cent versus the primary quarter of 2020, it stated.

© Thomson Reuters 2021