Ugma Calculator
A UGMA account lets an adult invest for a child without setting up a trust, but the gift is irrevocable and the child takes full control at the age of majority. The calculator below projects what that account could be worth: an initial deposit plus a monthly contribution, compounded monthly at an assumed annual return, over the years until the child reaches 18. Enter your own figures and the future value, total contributions, and investment growth appear together.
A projection, not a promise and not financial advice. Returns are assumed constant, taxes, fees, and inflation are excluded, and real investment returns vary and can lose money. A UGMA gift is irrevocable: once deposited, the money belongs to the child.
Quick Answer
With $10,000 already invested, $200 added every month, a 7% annual return compounded monthly, and 15 years to grow, the account projects to $91,881.93. Total contributions are $46,000.00 ($10,000 plus $200 times 180 months), so investment growth accounts for $45,881.93, almost exactly half the final value. Those figures are pre-filled in the calculator above.
Key takeaways
- A UGMA account holds financial assets (cash, stocks, bonds, mutual funds) for a minor. An adult custodian manages it, but the child owns the assets from day one.
- Contributions are irrevocable gifts. The custodian cannot take the money back, and can only spend it for the child’s benefit.
- The child takes full, unrestricted control at the age of majority, typically 18 or 21 depending on state law. There is no way to keep conditions on the money after that point.
- This tool compounds monthly and treats contributions as end-of-month payments. It excludes taxes, fees, and inflation, so treat every result as a before-tax projection.
- Compare the flexible UGMA against a 529 plan growth calculator before choosing: the 529 keeps parental control and education-only tax benefits, while the UGMA keeps flexibility and gives up control.
How to use the UGMA calculator
Enter four numbers and calculate. The results stay hidden until you click Calculate, and Reset restores the worked example.
- Enter the initial investment. The pre-filled $10,000 stands for money already in the account. Use 0 if you are starting from nothing.
- Enter the monthly contribution. The pre-filled $200 is a steady monthly habit. The tool has no yearly-contribution mode and no compounding-frequency choice: contributions are monthly, and compounding is monthly, always.
- Enter the annual return rate. The pre-filled 7% is an illustrative long-run assumption, not a forecast. Run a lower rate too, because a single assumed rate hides how much of the answer is hope.
- Enter the years until the child reaches 18. The pre-filled 15 years fits a 3-year-old. Adjust it to your child’s actual horizon, and remember some states terminate custodianship at 21 rather than 18.
- Click Calculate and read three lines: future account value, total contributions, and total interest earned (future value minus total contributions).
Two input behaviours are worth knowing. A blank field counts as 0, and the tool does not block negative entries, so a negative return or a negative contribution produces a mathematically consistent but meaningless projection; check for stray minus signs before trusting a result. At a 0% return the original tool broke and showed NaN, because its annuity formula divides by the monthly rate. That defect is fixed here: at 0% the future value is exactly total contributions, which is the correct limit of the formula.
The UGMA growth formula
Two pieces add up to the future value. The initial deposit compounds monthly for the whole period. The monthly contributions form an ordinary annuity, meaning each payment is treated as made at the end of its month, and each then compounds for the months that remain.
Future value = initial × (1 + r)n + monthly × (((1 + r)n – 1) ÷ r)
Total contributions = initial + (monthly × n); Interest earned = future value – total contributions
The end-of-month timing matters by a small, honest amount. If contributions were made at the start of each month instead, every payment would earn one extra month of growth, and the contributions piece would be larger by a factor of (1 + r). At 7% that is about 0.58% more on the contributions piece, roughly $370 on the worked example’s contributions portion. The tool does not offer that variant, so anyone contributing on the 1st of the month should read the result as slightly conservative. At a 0% return the annuity fraction is undefined, so the fixed tool uses the limit directly: monthly times months, which is what the contributions would be worth with no growth at all.
Worked example: $10,000 plus $200 a month for 15 years
The pre-filled inputs are $10,000 initial, $200 monthly, 7% annual return, 15 years. The monthly rate is 7 ÷ 100 ÷ 12 = 0.005833, and the period is 180 months. Running the formula gives the exact lines the calculator shows.
The split is the story. After 15 years, growth contributes almost as much as every deposit combined. Shorten the horizon and the balance flips: the tables below keep the same $10,000 start and $200 monthly habit while changing one variable at a time, so you can see time and rate doing their separate work.
| Horizon at 7% | Total contributions | Future value | Interest earned |
|---|---|---|---|
| 5 years | $22,000.00 | $28,494.83 | $6,494.83 |
| 10 years | $34,000.00 | $54,713.58 | $20,713.58 |
| 15 years (worked example) | $46,000.00 | $91,881.93 | $45,881.93 |
| 18 years | $53,200.00 | $121,269.60 | $68,069.60 |
| Return over 15 years | Future value | Interest earned | Reading |
|---|---|---|---|
| 3% | $61,068.86 | $15,068.86 | Cautious case, contributions still dominate |
| 5% | $74,594.83 | $28,594.83 | Middle case |
| 7% (worked example) | $91,881.93 | $45,881.93 | Growth matches deposits |
| 10% | $127,433.26 | $81,433.26 | Optimistic case, growth dominates |
Every row in both tables is a run of this calculator with only the named input changed. The practical lesson is unglamorous: starting earlier beats assuming a higher return, because time is the one input you cannot buy back later. A useful cross-check is the compound interest doubling time calculator, which shows how long each assumed rate takes to double money on its own.
UGMA vs UTMA vs 529 vs custodial Roth IRA
Families usually choose between four vehicles, and the differences are control, permitted use, and tax treatment, not just growth. The table keeps each distinction to one line.
| Vehicle | Who controls it, and until when | What the money can be used for | Catch |
|---|---|---|---|
| UGMA (this tool) | Custodian manages, child owns; full control passes at majority, usually 18 or 21 | Anything benefiting the child, before and after majority | Irrevocable; no control after majority; kiddie tax on earnings |
| UTMA | Same custodial shape, often to age 21 or later by state | Same, plus property like real estate and art | Same irrevocable catch; UGMA holds financial assets only |
| 529 plan | Account owner keeps control indefinitely; beneficiary can be changed | Qualified education expenses for tax-free earnings | Non-education withdrawals face tax plus a penalty on earnings |
| Custodial Roth IRA | Custodian manages until majority, then the young adult owns it | Retirement savings; contributions withdrawable, earnings rules apply | Child must have earned income; contributions cannot exceed it |
Two consequences deserve emphasis because rival tools skip them. First, custodial assets belong to the child, so financial aid formulas count them as student assets, which weigh more heavily than parent assets; a large UGMA balance can reduce aid in a way a parent-owned 529 does not. Second, the kiddie tax (next section) taxes a child’s unearned income above a threshold at the parent’s rate, which trims the after-tax value of a high-earning custodial account. Neither effect appears in this tool’s before-tax projection, and both argue for comparing vehicles with the 529 planning calculator and the investment fund calculator before funding one path exclusively.
The kiddie tax, in plain terms
Investment earnings inside a UGMA account are taxed each year as the child’s unearned income; they are not deferred until the child takes control. Under the kiddie tax rules described by the IRS, for the 2026 tax year the first $1,350 of a child’s unearned income is effectively untaxed, the next $1,350 is taxed at the child’s rate, and amounts above $2,700 are taxed at the parent’s marginal rate, where the rules apply (under 18, or 18 to 23 for a full-time student who does not provide more than half of their own support). The practical effect is that a UGMA account’s headline growth overstates its after-tax value once earnings pass the threshold, and the gap grows with the parent’s tax rate. Keep records of cost basis from the start: when the child eventually sells holdings, gains are measured from the original purchase price, not from the value on the transfer date. This section is general information, not tax advice; a tax professional should review any account large enough for the kiddie tax to bite.
What competing calculators miss
Rival UGMA tools mostly get the compound formula right and stop there. The gaps are in cadence, context, and honesty about limits:
- Annual-only tools. Several rival UGMA pages take an annual contribution and apply an annual formula. That is a different savings habit from a monthly one, and the two answers are not interchangeable. This tool is monthly throughout, matching how most families actually contribute.
- Multi-account bundles. Child-investment calculators that model four account types at once are useful for comparison, but they bury the UGMA-specific rules under shared assumptions. A dedicated UGMA tool can state the irrevocable gift, the age-of-majority handover, and the kiddie tax without dilution.
- Guides without a tool, and tools without the rules. Custodial guides explain UGMA versus UTMA well but offer no projection; generic compound interest tools project well but never mention that the money becomes the child’s unconditionally at majority, or that student-owned assets weigh on financial aid.
- Inflated worked examples. The old prose on this very page claimed a $5,000 start plus $200 a month for 10 years at 7% would reach about $48,000 with about $19,000 of earnings. The live tool’s own math gives $44,665.27 with $15,665.27 of earnings. Every example on the rewritten page is a verified run of the tool, not a rounded memory of one.
- The gap this page fills: monthly cadence stated plainly, the end-of-month timing disclosed, the zero-rate defect fixed, and the custodial consequences (irrevocable gift, majority handover, kiddie tax, aid impact) treated as part of the answer rather than footnotes.
Frequently asked questions
A UGMA account, under the Uniform Gifts to Minors Act, is a custodial account that holds financial assets such as cash, stocks, bonds, and mutual funds for a minor. An adult custodian manages the account, but the assets belong to the child from the moment they are deposited.
A UGMA account holds financial assets only, while a UTMA account under the Uniform Transfers to Minors Act can also hold property such as real estate and art. Both are irrevocable custodial gifts, and both hand full control to the child at the age of majority.
At the age of majority under the state law where the account was created, typically 18 or 21. From that point the former minor has full, unrestricted control and can spend the money on anything, including things the custodian would not have chosen.
No. Contributions to a UGMA account are irrevocable gifts to the child. The custodian can only withdraw funds for purposes that directly benefit the child, and cannot reclaim the money for their own use.
Earnings are taxed each year as the child’s unearned income. Under the kiddie tax rules for 2026, the first $1,350 is effectively untaxed, the next $1,350 is taxed at the child’s rate, and amounts above $2,700 are taxed at the parent’s marginal rate where the rules apply.
The future value equals total contributions exactly. The original tool showed NaN at 0% because its annuity formula divides by the monthly rate, and this page fixes that defect: with no growth, $10,000 plus $200 a month for 15 years gives $46,000.00, with $0.00 of interest.
No. The projection assumes a constant return, excludes taxes, account fees, and inflation, and treats contributions as end-of-month payments. Real returns vary year to year and can be negative, so run lower rates alongside your headline case.
It depends on what you value. A UGMA account offers flexibility, since the money can be used for anything benefiting the child, but you lose control at majority and the money can reduce financial aid. A 529 plan keeps parental control and offers tax-free growth for qualified education expenses, but restricts the use. Compare both before choosing.
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References
- Internal Revenue Service. Topic No. 553, Tax on a Child’s Investment and Other Unearned Income (Kiddie Tax) (Form 8615 threshold of $2,700 in unearned income, age conditions, and parent-rate treatment). Accessed October 24, 2026.
- Internal Revenue Service. Publication 929, Tax Rules for Children and Dependents will no longer be revised (for tax years 2022 and later, taxpayers use Forms 8615 and 8814 instead of Publication 929). Accessed October 24, 2026.
- Fidelity. Trump accounts vs. 529s, UTMA/UGMAs, and Roth IRAs: Which to pick to save for kids (no annual contribution limits with gift-tax rules still applying, 2025/2026 kiddie tax tiers of $1,350 and $2,700, full ownership at the age of majority). Accessed October 24, 2026.
- Thrivent. UGMA and UTMA Accounts: Complete Guide to Benefits and Setup (any adult can open an account, no annual limit on the amount, custodian manages while the child owns the assets, transfer at the age of majority under state law). Accessed October 24, 2026.
- Acorns. What Is a UGMA/UTMA Custodial Account? (UGMA holds financial assets while UTMA also holds property, custodial setup, and the difference from a 529 plan). Accessed October 24, 2026.
- U.S. Securities and Exchange Commission. For Students and Teachers (compound interest explained: interest earned on interest, with worked illustrations of growth over time). Accessed October 24, 2026.
- Nasdaq. Saving For College: UGMA and UTMA Custodial Accounts (UGMA limited to cash, securities and insurance policies, one custodian and one beneficiary, irrevocable gifts, no limits on withdrawal use). Accessed October 24, 2026.
- Kidopoly. Custodial Accounts Explained: UGMA and UTMA for Kids (custodian manages while the child is beneficiary, money legally belongs to the child from the first deposit, UGMA versus UTMA asset scope). Accessed October 24, 2026.
- LegalClarity. What Is Unearned Income for a Child: Kiddie Tax Rules (kiddie tax conditions, age categories, and the $2,700 threshold, citing IRS Topic No. 553 and Form 8615 instructions). Accessed October 24, 2026.
- NerdWallet. Kiddie Tax 2026: Definition, Example and Rules (2026 tiers: first $1,350 tax-free, next $1,350 at the child’s rate, above $2,700 at the parent’s rate; unearned income only, not wages). Accessed October 24, 2026.