UNest is an investment account that’s designed to help build savings for your child’s future. It’s appealing for parents who want an easy-to-use app and aren’t necessarily saving for a child’s school-related expenses. UNest funds are much more flexible than what you’d find in 529 savings accounts, though the tax benefits are different.
You might like Unest if you want to be able to choose between different investment portfolios based on risk tolerance and other factors. This makes it easy for beginner investors to get started without having to research individual stocks and companies.
But keep in mind, UNest requires you to make minimum monthly contributions and pay a subscription fee. Let’s dig into the details of our UNest review to see whether this investment account makes sense for you.
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Set up a custodial investment account and start contributing toward your child's future.
- Funds can be used for education or other expenses in the future
- Ability to choose from different investment portfolios
- Minimum monthly contribution required
What is UNest?
UNest is a company and mobile app that offers an investment account designed to build savings for kids. The company was founded in 2018 by Ksenia Yudina and is based in California. UNest’s mobile app is available on iOS and Android devices through the Apple App Store or Google Play.
The primary purpose of UNest is to build savings for your child’s future. This is done through what’s called a custodial account, which is an account that you manage for your child until they reach the age of majority, which is typically around 18 to 21 in most states. At that point, your child’s account is turned over to them and they can use the funds for whatever they want.
Until they’re older, you manage the account until it’s turned over to your child. This includes making monthly contributions, choosing how to invest money, and making eligible withdrawals.
Keep in mind that the funds in a custodial account can be used for just about anything that benefits your child. So they can act as a form of college savings plan to help cover education expenses, but they can also go toward buying a first car or putting a down payment on a house.
What types of accounts does UNest offer?
UNest offers a custodial investment account that’s called a Uniform Transfers to Minors Act (UTMA) account. This is similar to a Uniform Gift to Minors Act (UGMA) account with a few differences.
UTMA accounts generally provide more investment options than UGMA accounts. So if a UGMA account lets you invest in stocks, bonds, and mutual funds, then a UTMA account likely offers the same but might also provide options to invest in real estate, art, and more.
When your child reaches the age of majority, the UNest UTMA account converts to an individual brokerage account in their name. At that point, they can continue investing the funds in the account or withdraw them as needed.
Custodial account vs. 529 plan
Custodial accounts, like UNest, aren’t the same as 529 plans. Both types of accounts are designed to help build savings for a child, but they tend to have different tax benefits, investment options, and ways they can be used.
|Funds can be used for
Go with a custodial account if you want more investment options and more flexibility with how funds can be used. Choose a 529 plan if you want tax-advantaged savings on funds that will be used for school-related expenses.
Both types of accounts can be used as college funds, but 529 plans tend to have more benefits if you think college or something similar is in your children’s futures.
UNest offers ways to add cash to your UNest account when you purchase products and services from more than 150 brands, including Disney+, DoorDash, and Nike. You can check available offers in the UNest app. It typically takes 30 to 40 business days for rewards to post to your account.
This could be an easy way to boost your account balance if you’re already planning to make a purchase with a UNest partner that has an available offer.
Friends and family members can contribute to your child’s custodial account through the UNest gifting platform. Here’s how it works:
- A friend or family member picks an occasion
- They choose how much money to gift and add a message
- They select a payment method and complete the transaction
- They share the gift code with you to redeem it in the UNest app
This gifting platform isn’t necessarily any better than a friend or family member giving you cash. But at least it basically gives them a guarantee that the money will be going toward your child’s custodial account.
What kinds of investments can you make with UNest?
Apart from UNest Crypto, which is available only for UNest Plus accounts, UNest offers nine investment options spread across four types of portfolios:
This portfolio consists of fixed income and bond ETFs. You might prefer this portfolio if you have a low risk tolerance because bonds are generally less risky than many other types of investments, including stocks.
There are three age-based portfolios that consist of fixed income and equity investments. These portfolios adjust their mix of investments to be less aggressive as the child gets older and closer to the age of majority. So an age-based portfolio typically starts off more aggressive and gradually gets more conservative as time goes on.
You can choose between conservative, moderate, and aggressive age-based portfolios. The main difference between these three portfolios is how much potential risk is involved. The conservative portfolio is for lower risk tolerance and the aggressive portfolio is for higher risk tolerance. The moderate portfolio falls somewhere between the other two.
3. Socially responsible
You can choose between three socially responsible age-based portfolios, called ESG investments, that include a mix of fixed income and equity investments. These portfolios are also separated into conservative, moderate, and aggressive options.
ESG stands for environmental, social, and governance. ESG isn’t exactly the same as sustainable investing, such as investing in a company because it’s all about renewable energy. But it does follow some of the same broad principles as sustainable investing, including reducing a company’s environmental impact.
But the other parts of ESG investing include social factors, such as workplace safety and human rights, as well as corporate responsibility, such as whether shareholders get a say in important company decisions.
This portfolio invests 100% in equities through Vanguard equity index ETFs. You might invest in this portfolio if you’re comfortable with money going toward stock investments.
Take noteYou can change your asset allocation at any time, but there could be tax implications because UNest would have to sell your investments and invest them again. You have to contact UNest support in the app or by emailing email@example.com if you want to create a custom investment portfolio. Consider speaking with a financial advisor about these types of personal finance scenarios.
Does UNest charge any fees?
UNest doesn’t charge any investment or maintenance fees, but you have to pay a subscription fee to use UNest. The monthly fee depends on the plan you choose, UNest Core (regular plan) or UNest Plus (family plan).
|$2.99 per month
|$5.98 per month
|Number of custodial accounts
|Access to UNest Crypto
|Online account setup and management
|Option to get gifts from family and friends
|UNest support access
There are three main differences between UNest Core and UNest Plus:
- Number of custodial accounts
- UNest Crypto access
UNest Core has the cheaper price at $2.99 per month compared to UNest Plus at $5.98 per month. This is likely because a UNest Core account only has one attached custodial account. That means you can have only one child with a custodial account with UNest Core. But UNest Plus accounts get an unlimited number of custodial accounts.
UNest Plus accounts also get access to UNest Crypto, which gives you the option to invest in certain cryptocurrencies. This includes bitcoin, ethereum, solana, and more. UNest Core accounts don’t get access to UNest Crypto, but they can still invest in the available portfolios.
You should choose a UNest Plus account if you have multiple children and want to open multiple custodial accounts, and/or you want access to crypto investments. Otherwise, UNest Core is cheaper and provides the same benefits as UNest Plus.
Keep in mindSome custodial accounts have no account, maintenance, or subscription fees and could provide a cheaper option than UNest. This includes a custodial account from Charles Schwab, which also lets you easily customize how to invest your money.
How to open an account with UNest
You can only access UNest accounts through a mobile app on iOS or Android devices. You can download the UNest app from the App Store or Google Play. You’ll be led to the iPhone and Android download links if you select the “Get Started” option from the UNest website.
You need to provide some information for both you and your child to get started with a UNest account:
- Your legal names
- Your dates of birth
- Your Social Security numbers or ITINs
- Your permanent address
- Information regarding your U.S. citizenships or legal residencies
You will also need to connect a U.S.-based personal bank account through Plaid. You can open a UNest account for any child (minor) under the age of 17, even if they’re not related to you.
FAQs about UNest
What is a UTMA account?
Uniform Transfers to Minors Act (UTMA) accounts are custodial accounts that hold assets for a minor. The custodian manages the account, but all assets are owned by the minor. The account turns over to the former minor when they reach the legal age of adulthood in their state, which is usually around 18 to 21.
Is my money safe with UNest?
UNest investment accounts are protected up to $500,000 through SIPC insurance for money that’s already been invested. You’re protected up to $250,000 through FDIC insurance for any money in your account that hasn’t been invested. These protections are provided by UNest partners, Apex Clearing Corporation (SIPC) and First Horizon Bank (FDIC).
Can I withdraw from UNest?
Yes, you can typically withdraw any time from your UNest account without any penalties as long as funds are used for the benefit of the child on the account. Withdrawals are taxed similarly to any earnings on the account, which is often at the child’s tax rate for unearned income.
Other investment platforms to consider
Charles Schwab offers 529 plans and custodial accounts if you specifically want to put money away for a child. A 529 account could make more sense than UNest because it comes with tax advantages — which could include state tax deductions or credits — for funds you plan to put toward school-related expenses.
A Schwab custodial account provides more flexible and customizable investment options than a UNest account. This includes being able to buy and sell individual stocks and choose which mutual funds or ETFs to put money into. And there aren’t any subscription or maintenance fees to worry about.
Read our Charles Schwab review.
Robinhood is an investment app that’s suited for both beginners and advanced investors because of its easy-to-use interface and commission-free trading on stocks and cryptocurrencies. It’s not specifically designed for setting aside funds for children, but it could help you learn more about investing and building savings, regardless of your end goal.
Read our Robinhood review.
You might use UNest as an alternative to a 529 account if you want your child to have more flexibility with their savings. Funds in custodial accounts can typically be used for anything, whereas funds in 529 accounts are meant to be used for school-related expenses.
It’s easy to get started with UNest because you can use a mobile app to manage your account. But you might feel limited with its potentially inflexible investment options compared with a custodial account from Charles Schwab or another company. You also have to pay a subscription fee to use UNest, which isn’t the case for all custodial accounts.
To learn more about different investment options, check out our list of the best investment apps.
FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.