How to Buy Stock for Kids in Nigeria

It is very easy for parents or guardians to buy stocks for their child or children. This is a good money habit and laying down their financial freedom.

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As a parent, it's a normal or most important thing to give your kids the best possible beginning, especially when it comes to financial support. And one of the way of providing this financial freedom is through investing.

Buying Stock For Your Kids

Minors are not allowed to buy stocks, so you as a parent have to do it on their behalf. To do that, you'll have to set up a custodial brokerage account, usually called Uniform Transfer to Minor Act (UTMA) or Uniform Gift to Minor Act (UGMA) account on their behalf.

However, there are two provided options when it comes to opening this type of account; guardians account and custodial account.

With Guardians Account, ownership of the account is retailed and gains are taxed at your rate. While Custodial Account works in the sense that the child own the account even though you're still the manager.

You can decide what type of account would work best for your child. If you choose a custodial account, it is important to understand the restrictions that come with managing your child’s money until he or she can do it.

In addition, it also very important to find out what minimum requirements that comes with the account opening, and find out what other information and documentation that will be required to open an account on behalf of your child.

Help Your Child Choose Best Stocks

In this section, I'm going to discuss how you're going to help your child to choose the best stocks that suit h/er interest.

First of all, look at companies your child have interest in, such as Coke or Electronic Art. Let your child learn about those companies and offers different options. Talk about what makes good investment and also, you can define the merits of dividend stocks as well if h/she is a teenager.

Merits of dividend stocks let h/er begin learning about income investing. You can also look for Direct Purchase Plans offered by some companies, making you to spend less on transaction fees and charges.

Best Stocks To Buy For Kids

Here are the top 10 best stocks to invest for your child.

1. Amazon [NASDAQ:AMZN]
2. Coke [NASDAQ:COKE]
3. Chipotle Mexican Grill [NYSE:CMG]
4. Disney [NYSE:DIS]
5. Draft Kings [NASDAQ:DKNG]
6. Electronic Art [NASDAQ:EA]
7. Ferrari [NYSE:RACE]
8. Five Below [NASDAQ:FIVE]
9. Lululemon [NASDAQ:LULU]
10. Starbucks [NASDAQ:SBUX]

Best Brokerage To Buy Stocks For Kids

Here are top 5 best brokerage to buy/invest stocks for your kids in Nigeria.

Bamboo

Bamboo is a stock broker that gives access to over 3,000 stocks listed on the Nigeria Stock Exchange (NSE) and US Stock Exchange.

You can start investing in stock for your kids on this broker with minimum of $20, right from your internet-connected smartphone. The Bamboo mobile app has a very clean and  user-friendly interface.

The mobile app is available for download on Google play store for Android users and iOS app store for iPhone and iPad users.

Trove

Trove is another broker that allow you to buy stocks for your kids in Nigeria. The digital investment platform support stocks, bonds, exchange-traded funds and other digital asset with as little as NGN1,000.

Trove charge 1% commission on every buying and selling of stock above $200. You can download trove mobile app on apps store and it's also available on web.

Chika

Chaka is another digital investment platform in Nigeria for kids that gives access to stocks listed on the Nigerian & U.S stock exchanges as well as global blue-chip companies from over 40+ countries. You can start investing foreign stocks for your kids with Chaka from as low as $10 or N1000.

Chipper Cash

This is another invest platform suitable for buying and investing stocks for kids. In the platform, you will be able to buy US companies stock such as Amazon, Google, Microsoft etc.

You can start buying stock on Chipper Cash as low as $1, that's NGN416 at the time this article was published.

Chipper Cash app is available for download in the most popular app stores available online.

How to Buy Stocks For Kids

I will be using chipper cash in this tutorial to teach you how purchase US companies stocks for your kids. So, follow the below step-by-steps guides to buy stock for your kids.

• First of all, download the chipper cash app
• Install and launch the app
• Register and verify your account
• Login to your chipper cash account
• Fund your chipper cash walllet
• Click on 'Invest' at the button of your dashboard
• Choose 'stock' and select which company stock you'll be buying.
• Confirm your order and you will see your purchased stocks.

FAQs

Here are most Frequently Asked Questions about buying stocks for kids.

Can I open a stock account for my child?

Yes! You can, however, it must be a Guardians Account or Custodial Account, which is also called Uniform Transfer to Minor Act, UTMA.

Can I gift stock to my child?

Yes you can gift stock to your child. If s/he a minor, you can open a custodial account for h/er, so that s/he can have access to it in the future.

Is it better to gift stock instead of cash?

For me, I'd prefer to gift stock to my child instead of cash, because stock can be a good investing plans to kids.

Is it better to inherit stock instead of cash?

I'd rather invest all my money in stock so that my kids can inherit it when I'm gone than to keep the cash for them.