Fidelity launches saving, investing account for teenagers

NEW YORK (AP) — Looking to draw in the next generation of investors, Fidelity Investments is launching a new type of account for teenagers to save, spend and invest their money.

The account is for 13- to 17-year-olds, and it will allow them to deposit cash, have a debit card and trade stocks and funds. The teens can make their own trades through a simplified experience on Fidelity's mobile app, with zero account fees or minimum balances, though the youth account requires a parent or guardian to have their own Fidelity account as well.

It's the latest step in a broad push by the industry to draw more first-time investors into the market. Over the years, brokerages have slashed trading commissions to zero and offered easy-to-use apps in hopes of boosting the percentage of U.S. households that are in the stock market, which has climbed back above half. Holding stocks is one of the best ways to build wealth over the long term, but with that also comes risk.

Younger investors in their 20s and 30s have been taking the market by storm, with trading volumes rising across brokerages, but they sometimes get criticism for trading too quickly and rashly. Earlier this year, a loosely organized band of investors sent GameStop's stock soaring suddenly, while communicating with each other on Reddit and other social media, only for most of the gains to evaporate before yo-yoing in the highest-profile example.

Fidelity's youth account will not put limits on how much or how often a teen can trade, though it won't let them buy or sell cryptocurrencies, stock options or ETFs that use borrowed money to supercharge gains and losses. Fidelity's hope is that parents and guardians will use the new youth account as a way to have conversations with their kids about how to safely invest for the long term.

“There is a lack of financial...