Average Cost of Car Insurance in New York for 2023

Average Cost of Car Insurance in New York

When shopping for car insurance, how much is too much to pay? The answer can vary based on your driving record, age, car type, insurer, and even where you live. But knowing the average cost of coverage in your state can help as you’re comparing quotes. Here’s a look at average prices in New York and how different factors can impact how much drivers there pay for protection.

Key Points

•   The average cost of car insurance in New York for 2025 is $1,808 annually.

•   Age, gender, and location significantly affect rates, with younger drivers and city residents paying more.

•   Traffic violations, like speeding tickets and DUIs, can increase insurance costs.

•   Tips for affordable insurance include shopping around, exploring discounts, and maintaining a good driving record.

•   A higher deductible can lower monthly premiums but increases out-of-pocket costs for accidents.

How Much Does Car Insurance Cost in New York?

Drivers in New York pay an average of $1,808 per year for auto insurance, according to a 2025 U.S. News & World Report analysis of cheap car insurance companies.

Average Car Insurance Cost in New York per Month

The average monthly cost of car insurance in New York is $150.66. However, the amount you pay can vary by insurer, as the chart below shows.

Company Average Cost Per Month Average Annual Cost
Allstate $130.25 $1,563
Erie $121.08 $1,453
Geico $122.25 $1,467
Mercury $385.42 $4,625
Progressive $77.17 $926
State Farm $150.50 $1,806
USAA $116.208 $1,393

Source: U.S. News & World Report

Average Car Insurance Cost in New York by City

Your location can influence how much you pay for car insurance in New York. That’s because when setting rates, insurers often consider the local volume of traffic, accidents, and crime. People living in cities tend to pay more for car insurance than those living in small towns or rural areas. But as the chart below shows, prices can also vary by city. Here are estimates for 10 of the biggest cities in New York:

City Average Annual Cost
Schenectady $1,736
Rochester $1,683
Albany $1,751
Utica $1,833
Syracuse $1,804
Buffalo $2,125
New Rochelle $1,939
Yonkers $2,469
Mount Vernon $2,623
New York City $2,600

Source: Insure.com

Average Car Insurance Cost in New York by Age and Gender of the Driver

Your age can impact your premiums. Younger, first-time drivers, for example, often pay more for coverage because they tend to have more accidents than older, more experienced drivers. Gender can play a role, too. In New York, women may end up paying less for car insurance than men because they tend to get into fewer severe accidents.

Age of Driver Average Annual Cost for Men Average Annual Cost for Women
17 $5,487 $5,046
25 $2,077 $2,048
60 $1,577 $1,642

Source: U.S. News & World Report

Average Car Insurance Rates After an At-Fault Accident

As anyone who has been in a fender bender knows, car insurance rates tend to go up after an accident. New York drivers with a clean record pay around $1,808 per year for coverage. That amount rises to an average of $1,926 for drivers who have one accident.

But even traffic violations can cause prices to go up. A driver with one speeding ticket on their record pays an average of $2,064 for coverage, and one driving under the influence (DUI) offense causes rates to jump to an average of $2,559.

Recommended: Car Insurance Terms, Explained

Average Car Insurance Costs for Good and Bad Credit

Your credit score doesn’t just impact your ability to secure a loan. It can also play a role in how much you pay for car insurance. According to an analysis conducted by LendingTree, drivers with poor credit pay $4,088 on average per year for coverage, while those with excellent credit pay around $2,096.

What Else Affects Your Car Insurance Cost?

Here are other factors that can cause your car insurance rates to go up — or down.

Marital Status

Married drivers may qualify for more discounts than single drivers, since insurers often place them in a different risk category.

Make and Model of the Car

Your car’s safety features, accident rating, size, and overall value can all affect your insurance rates.

Amount of Coverage

The amount of coverage you need comes down to a number of factors, including your state’s minimum car insurance requirements, your budget, and your lifestyle. As a rule of thumb, the more coverage you have, the more expensive your policy will be.

The type of deductible you choose can also influence your overall costs. A deductible is the amount of money you’re responsible for after an accident before the insurance company pays its portion. With a higher deductible, you pay less money in premiums each month, but will be responsible for a bigger share of the expenses if you get in an accident.

Insurance History

Drivers who allow their coverage to lapse may be more likely to cancel their policy, so having a reliable history with one insurer may qualify you for a lower rate. In fact, it’s possible you’ll get a better quote when switching car insurance carriers than if you purchase insurance after going a few years without it.

Recommended: How to Lower Car Insurance

How to Get Affordable Car Insurance

The cost of coverage often varies by insurer. To find affordable car insurance, it’s a good idea to shop around and compare quotes. You can search online insurance companies and compare multiple car insurance rates.

You’ll also want to figure out how much car insurance you need. Keep in mind your state’s minimum car insurance requirements as well as additional coverage you may need.

If you’re looking to lower your car insurance, there are several strategies to consider. You may want to explore different policy options; look for bundling opportunities, such as getting your home and auto insurance from the same company; ask about possible discounts; and consider whether a policy with a higher deductible makes sense for you.

The Takeaway

Drivers in New York pay an average of $1,808 per year for car insurance. However, the amount you pay can depend on several factors, including your age, gender, driving record, credit score, marital status, and where you live. It helps to shop around and compare multiple quotes to find coverage that fits your needs and budget.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Find affordable auto, life, homeowners, and renters insurance with SoFi Protect.

FAQ

How much is car insurance in New York monthly?

The average cost of car insurance in New York is $150.66 per month. But you may end up paying a different amount based on a wide range of factors, such as age, gender, driving record, credit score, and location.

How much is car insurance in New York for a 25-year-old?

A 25-year-old man pays an average of $2,077 per year for car insurance, according to a 2025 analysis conducted by U.S. News & World Report. Women of the same age pay an average of $2,048 per year. Gender and age are two of several factors that can impact how much you pay for coverage.

Is $300 a lot for car insurance?

In many cases, the average monthly cost for coverage in New York is below $300. But premium amounts vary based on a number of factors. An 18-year-old male driver, for example, could very well pay more than $300 per month because of his age and lack of driving experience.


Photo credit: iStock/cmart7327

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Student Loan Forgiveness for Nurses

Almost 70% of nurses graduate with student loan debt, according to the American Association of Colleges of Nursing, and many of them owe a substantial amount. Nurses have a median student loan debt of more than $40,000, reports the Education Data Initiative.

Fortunately, there are a number of programs that offer student loan forgiveness for nurses, typically in return for a specific service commitment. Depending on the program, a nurse might have their student loan debt partially or fully forgiven.

Read on to learn more about loan forgiveness for nurses and the programs that may help you get relief from nursing student loan debt.

Key Points

•   About 70% of nurses have student loans to repay, and the median student loan debt for nurses is more than $40,000.

•   Nurses may qualify for student loan forgiveness in exchange for working in high-need or shortage areas for a specific number of years.

•   Eligibility for the Nurse Corps Loan Repayment Program includes RNs, APRNs, and nurse faculty members with a two-year service commitment. The program pays up to 85% of a nurse’s student loan debt.

•   The Faculty Loan Repayment Program provides up to $40,000 for nurses from disadvantaged backgrounds who teach at an eligible school for two years.

•   The National Health Service Corps Loan Repayment Program offers nurses up to $75,000 for two years of full-time service in designated shortage areas.

What Is Loan Forgiveness and How Does It Work?

If you borrowed student loans to pay for nursing school, student loan forgiveness can eliminate some or all of your debt, relieving you of the responsibility of repaying it.

It’s possible to receive nursing loan forgiveness for both federal and private student loans.

You must apply for forgiveness through one of several programs, and agree to the program’s terms, which may include working in a high-need area and committing to a certain number of years of service.

In the meantime, you will typically continue to make your student loan payments until you achieve forgiveness. You can factor those monthly loan payments into your financial plans as you’re creating a budget as a nurse.

Student Loan Forgiveness Programs for Nurses

Many of the forgiveness programs for nurses are available at the federal level. These are some of the top programs and their eligibility requirements.

Nurse Corps Loan Repayment

Offered through the Health Resources and Services Administration (HRSA), the Nurse Corps Loan Repayment program pays up to 85% of eligible federal and private student loan debt for qualifying nurses.

To be eligible, you must be a registered nurse (RN), an advanced practice registered nurse (APRN), or a nurse faculty member who attended an accredited nursing school. In addition, you must agree to a full-time two-year service commitment at an eligible critical shortage facility or nursing school.

During the two years that you work, you’ll receive 60% toward your qualifying student loan debt. After you complete your service, you will have the opportunity to serve for an additional year and receive another 25% of your student loan balance.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on federal Direct loans, which include Direct Subsidized loans, Direct Unsubsidized loans, Direct PLUS loans, and Direct Consolidation loans.

To be eligible, borrowers must work full-time in public service for an eligible employer such as a federal, state, local, tribal, or military government organization or qualifying nonprofit, and make the equivalent of 120 qualifying monthly payments under an income-driven repayment (IDR) plan.

If you are a nurse working for a qualifying employer, you may be eligible for PSLF. To apply, log onto StudentAid.gov and sign up for an IDR plan if you are not currently on one. Then you can submit an application. The PSLF Help Tool can walk you through the process.

Perkins Loan Cancellation

Nurses with federal Perkins loans may be eligible for up to 100% cancellation of their loans after five years in a public service job through Perkins Loan cancellation.

Perkins loans are subsidized low-interest federal student loans for students with exceptional financial need. Although the Perkins loan program ended in 2017, the loans are still eligible for forgiveness.

To qualify for Perkins Loan cancellation, you must work full-time as a nurse and provide direct care to patients.

Perkins Loan cancellation takes place in increasing percentages for each year worked:

•   Years 1 and 2: 15% of the loan amount

•   Years 3 and 4: 20% of the loan amount

•   Year 5: 30% of the loan amount

To apply for Perkins student loan forgiveness for nurses, contact the school that issued your Perkins loans or reach out to your loan servicer to get the application forms.

Active Duty Army Nurse Loan Repayment Program/Health Professions Loan Repayment Program

The Army offers student loan forgiveness for nurses, including the following programs:

•   Active Duty Health Professions Loan Repayment program (ADHPLRP): Nurses on active duty for a minimum of two years can get up to $40,000 of their qualified loans repaid annually for a maximum of three years through the ADHPLRP program.

•   Health Professions Loan Repayment Program (HPLRP): Nurses in the Army Reserves Troop Program Unit (TPU), Army Medical Department Professional Management Command (APMC), or Individual Mobilization Augmentation (IMA) program may be eligible for loan repayment if they are a psychiatric nurse practitioner; family nurse practitioner; operating room nurse; or a nurse anesthetist, critical care and public health. Those who qualify can receive a maximum of $20,000 annually applied to their education loans for a total of $60,000.

Find out more about these Army loan repayment programs for nurses, including how to apply.

Faculty Loan Repayment Program

Nurses (RNs and APRNs) from disadvantaged backgrounds who are faculty members may be eligible for the Faculty Loan Repayment Program from the HRSA.

Those who qualify can get up to $40,000 of forgiveness for their federal and private student loan debt. In return, they must serve for at least two years as faculty at an eligible health professions school in a U.S. state or territory.

National Health Service Corps — Indian Health Service

Nurse practitioners and certified nurse midwives who work at Indian health service facilities, tribally operated 638 health programs, and urban Indian health programs may be eligible for student loan repayment through this program.

Because of the critical shortage of nursing professionals who provide primary care services in high-need areas, the National Health Service Corps (NHSC) has increased the award amount. Qualifying nurses can now receive up to $75,000 for a full-time, two-year service commitment, or up to $37,500 for a half-time, two-year service commitment.

You can get additional information and application instructions from the NHSC.

National Health Service Corps (NHSC) Loan Repayment Program

The NHSC Loan Repayment Program offers loan repayment assistance to qualifying nurses who serve at least two years at an NHSC-approved site in a health professional shortage area or designated maternity care target area.

Nurses can choose a full-time or half-time clinical practice at an NHSC-approved site for their two years. Those who provide full-time primary care can receive up to $75,000 for their federal or private student loans, while those in other nursing roles can receive up to $50,000 for a two-year term. Nurses who work half-time providing primary care can receive up to $37,500, and those in other qualifying roles can receive up to $25,000.

If you have Spanish-language proficiency, you may also be eligible for a one-time enhancement award of $5,000, in addition to your loan repayment award.

NHSC Substance Use Disorder Workforce Loan Repayment Program

To help fight the opioid crisis by recruiting and retaining health professionals to work in underserved areas and expand substance use disorder treatment and prevent overdose deaths, the NHSC launched this program.

To be eligible, nurses must work in primary care or behavioral health. Those who provide full-time direct clinical care can receive up to $75,000 toward their federal and private loans for a three-year service commitment, while those who work half-time providing direct clinical care can receive up to $37,500.

Any nurse interested in applying to the NHSC Substance Use Disorder Loan Repayment Program must also meet the following requirements:

•   U.S. citizenship (U.S.-born or naturalized) or a U.S. national

•   In an eligible discipline with qualified student loan debt for your nursing education

•   A provider in the Medicare, Medicaid, and the State Children’s Health Insurance Program

•   Fully trained and licensed to practice in the NHSC-eligible discipline and state you’re applying to serve

•   Work at an approved treatment facility

Nurses with Spanish-language proficiency may qualify for a $5,000 one-time award enhancement for a total loan repayment award up to $80,000 for full-time participants and up to $42,500 for half-time participants.

NHSC Rural Community LRP

This loan repayment program from the National Health Service Corps (NHSC) Rural Community Loan Repayment program in conjunction with the Rural Communities Opioid Response Program (RCORP) is for nurses who work to combat the opioid epidemic in rural communities.

Eligible nurses may receive up to $100,000 for full-time service and up to $50,000 for half-time service to repay qualifying federal and private student loans. In exchange for loan repayment, nurses must serve three years at an NHSC-approved substance abuse disorder treatment facility in a shortage area.

If you have Spanish-language proficiency, you may receive a one-time enhancement award of up to $5,000 for a total loan repayment of up to $105,000 for full-time service, and up to $55,000 for half-time service.

Alternatives to Student Loan Forgiveness for Nurses

If you don’t qualify for nursing loan forgiveness, there are other ways to make repaying your student loans more manageable. Options to explore include:

Income-Driven Repayment

Income-driven repayment (IDR) plans base your federal loan payments on your discretionary income and family size. This often results in a lower monthly loan payment. Under an IDR plan, you could qualify for forgiveness of your remaining student debt after 20 or 25 years.

You can apply for one of the income-driven repayment plans online through your loan servicer. You can select the IDR plan you’d like or ask your servicer to choose a plan for you based on the lowest monthly payment possible.

Student Loan Refinancing

With student loan refinancing, you replace your current loan with a new loan from a private lender. Ideally, the new loan will have a lower interest rate and more favorable terms that could reduce your monthly loan payments.

You can refinance federal student loans, private student loans, or both. However, be aware that when you refinance federal loans, they become ineligible for federal benefits like income-based repayment plans and forgiveness.

Using a student loan refinancing calculator can help you determine whether refinancing makes sense for your situation.

Borrowers interested in refinancing student loans to save money should compare lenders and offers to see what they can qualify for, and then choose the best option.

Recommended: Student Loan Refinancing Guide

The Takeaway

Nurses with student loan debt may be able to have some or all of their debt canceled through one of the many available programs that offer student loan forgiveness for nurses. To qualify, nurses generally must be employed in an eligible job in a designated location and make a commitment to work for a certain number of years.

Borrowers who don’t qualify for forgiveness programs still have options to help manage their nursing student loan debt. Methods to explore include income driven repayment plans and student loan refinancing to potentially help lower monthly loan payments.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Will student loans be forgiven for nurses?

There are a variety of student loan forgiveness programs for nurses. For instance, the Health Resources and Services Administration offers the Nurse Corps Loan Forgiveness Program for qualifying nurses who commit to working two years in a critical shortage area. The National Health Service Corps has several different loan repayment programs that nurses may apply for. And nurses who work in public service may qualify for the Public Service Loan Forgiveness program. Do some research to see what forgiveness programs you may be eligible for.

Do nurses qualify for student loan forgiveness?

Nurses may qualify for student loan forgiveness as long as they meet the eligibility requirements for one of the nursing student loan forgiveness programs. Many of these programs require you to work in certain types of jobs for a specific period of time in return for partial or full cancellation of your student loans. You can explore some of the popular loan forgiveness programs for nurses, such as the Nurse Corps Loan Repayment Program and the nursing forgiveness options offered by the National Health Service Corps Loan Repayment Program.

Can my student loan be forgiven due to COVID?

While your student loan cannot be forgiven due to COVID, your student loan payments that were paused from March 13, 2020 until September 1, 2023 because of the COVID-19 pandemic do count toward Public Service Loan Forgiveness as well as forgiveness under income-driven repayment plans.


Photo credit: iStock/Delmaine Donson

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Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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Bull Markets, Explained

Bull Markets, Explained

A bull market occurs when a broad market index rises at least 20% over two months or more. Bull markets signal higher levels of investor confidence and optimism about the future of the market. They are generally a sign of a strong, healthy economy.

The opposite scenario, in which stock prices fall by 20% over an extended period, is known as a bear market.

If you’re investing in the stock market, it’s important to know the nature of bull markets and their potential impact on your returns.

Key Points

•   A bull market is defined by a 20% increase in a broad market index over a period of at least two months.

•   Investor confidence and optimism significantly rise during bull markets.

•   Bull markets often align with periods of economic expansion and growth.

•   Diversification and setting clear goals are essential for managing investments.

•   Investors may use a long-term buy-and-hold strategy in a bull market in hopes of seeing gains.

What Is a Bull Market?

A bull market is broadly defined as a period during which asset prices rise over time. The traditional benchmark for identifying a bull market is an increase of 20% or more in a market index over a two-month period. For example, stock experts might look closely at the Dow Jones Industrial Average (DJIA) or the S&P 500 to determine whether a bull market exists.

Bull markets can imply that the economy is in good shape, with unemployment low and new jobs being created. Investors tend to view a bull market favorably because it suggests that stock prices may continue to rise over the long term. People who buy stocks early in a bull market may benefit later from the investments’ significant price appreciation.

Why Is It Called a Bull Market?

Although there’s no single explanation for how bull and bear markets got their names, people often suggest that the descriptive names are meant to reflect the nature of each animal.

Bulls, for instance, have a reputation for charging or attacking. In a bull market, eager investors may rush in to buy stocks in the hope of capitalizing on future price increases.

Bears, on the other hand, are often seen as being defensive animals that only attack when threatened. In a bear market, it’s common to see investors pull back out of caution and sell off stocks they own or avoid buying new ones. Those behaviors are often driven by fear and uncertainty about the market trending down.

Characteristics of a Bull Market

Identifying when a bull market begins or ends is sometimes challenging, given the nature of stock prices and how rapidly they can move up or down. Generally, there are three indicators that stock experts use to determine whether a bull market exists.

•   Stock prices, or prices for a broad market index, have increased by 20% or more over a set period of time, typically two months or longer.

•   Investor confidence is high and those buying into the market have an optimistic outlook toward the future.

•   Overall economic conditions are largely positive, with low unemployment rates and, ideally, low inflation rates as well.

These three signs usually indicate that the market is on a sustained upswing. Other indications of a bull market can include strong earnings reports and marked increases in investors’ dividends.

What Causes a Bull Market?

Bull markets are usually driven by changing undercurrents in the economy. They tend to reflect the business cycle.

The business cycle experiences periods of expansion, followed by periods of contraction. Real gross domestic product is a commonly used metric for determining which of four phases the economy is in.

•   Expansion. During the expansion period, the economy is growing and domestic production is up. There may be a bull market for stocks during this period.

•   Peak. A peak occurs when the economy exhausts its ability to grow. At this stage, the bull market typically hits its highest levels before entering the next phase.

•   Contraction. During the contraction period, the economy shrinks. Companies may cut back on spending or hiring to save money and stocks may enter bear market territory.

•   Trough. The trough is the lowest point in the business cycle. It’s followed by the beginning of the next expansion phase, which can open the door to a new bull market.

The business cycle also influences when bear markets occur. In addition, there are times when a bull or bear market is triggered by something other than the business cycle.

Example of a Bull Market

The bull market that began in 2009 following the shock of the financial crisis is the longest on record, lasting until the bear market that occurred in early 2020.

Several factors contributed to the sustained length of the bull market, including strategic moves to manage monetary policy on the part of the Federal Reserve, and tax breaks delivered by the 2017 Tax Cuts and Jobs Act.

Many stockholders benefited from steady dividend payouts, and the real estate market also delivered a strong performance during that time.

Bull Market vs Bear Market

Bull markets and bear markets are opposites in terms of how participants behave and what the outcomes can mean for investors. Bull markets typically involve upward movement of stock prices while bear markets indicate a downturn.

In a bull market, investors tend to take a positive view of the market. Bear markets, on the other hand, can trigger pessimism, fear, or other negative feelings among investors.

Bull markets are usually marked by thriving economies and high levels of corporate growth. Bear markets point toward a slowing economy and limited growth. In extreme cases, a bear market could suggest that a recession may be on the horizon (although a recession can offer certain opportunities for investors as well).

Investing Tips During a Bull Market

Investing in a bull market isn’t one-size-fits-all, so your personal approach may be different from other investors. There are, however, a few overall strategies that could help you to try and generate returns while taking on a level of risk you’re comfortable with.

Keep Your Goals In Sight

It’s easy to be tempted to follow the crowd when investing in a bull market or a bear market, but it’s important to stay focused on your individual goals, especially if you’re a beginning investor. If you already have a financial plan in place, that plan can act as a guide for how to choose the right asset allocation during a bull market.

Diversify Your Portfolio

Diversification is an important tool for managing risk in a portfolio. When you’re diversified across different asset classes or industries, it helps to limit your exposure to certain kinds of investment risk. If one investment begins to decline in value, your other investments can help to bolster your portfolio.

A higher allocation to stocks may be optimal if stock prices are rising, but you may want to balance those out with less risky investments, like bonds.

If you’re investing in mutual funds or exchange-traded funds (ETFs), consider what assets each one holds to avoid becoming overweighted in one particular industry or sector.

Consider Going Long in Your Positions

“Going long” simply means adopting a buy-and-hold approach when investing in a bull market. The end goal is to buy stocks at a low price, then sell them later for a higher price to try and generate a return.

The Takeaway

Bull markets, in which asset prices rise and investors feel optimistic, are a natural part of the market cycle. A bull market begins when a market index rises 20% or more over a two-month period, and it can last months or years.

Generally, during a bull market, maintaining a diverse portfolio and a clear idea of your goals can help you manage your investments prudently.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Is a bull market a good market?

A bull market usually signifies that the market is strong. A market where stock prices are generally increasing can offer an opportunity to buy and hold stocks — if you can purchase them before prices rise too high.

How long can a bull market last?

Bull markets have no set duration; they can last months or even years. When a bull market occurs, it typically sticks around for a longer period of time than bear markets do.

Should you sell stocks in a bull market?

Selling stocks in a bull market could make sense if you’re able to sell them for substantially more than you paid for them. Essentially, it all comes down to timing and what makes sense for your individual goals and tolerance for risk.


About the author

Rebecca Lake

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.



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Opening a Brokerage Account for Your Child

Opening a Brokerage Account for Your Child

Brokerage accounts for kids are generally custodial accounts, with the parent or guardian managing the assets until the child reaches adulthood. Only the parent or guardian can open the brokerage account, even when the account bears the child’s name.

When the child reaches maturity — the legal age varies by state — they would take possession of the account. Overall, the process for how to open a brokerage account for a child is fairly straightforward. But there are things to be aware of.

🛈 SoFi Invest offers brokerage accounts to eligible members aged 18-plus, but it does not currently provide brokerage accounts to minors.

Key Points

•   Opening a brokerage account for a child involves selecting a brokerage that offers investment accounts for kids.

•   A guardian account allows investing on behalf of the child, with assets and tax liability belonging to the guardian.

•   A custodial UGMA or UTMA account holds assets for the child, with tax liability assessed at the child’s rate.

•   Investments in a child’s brokerage account can include stocks, bonds, mutual funds, and ETFs.

•   Involving the child in investing provides educational benefits, such as learning about markets, compound interest, and financial management.

Why Open a Brokerage Account?

A brokerage account is an investment account that operates through a brokerage firm. When you open a brokerage account, you deposit money into it, then use that money to buy securities. You can also sell securities that you’ve purchased. Depending on where you open a brokerage account, you may be able to buy stocks or other assets, such as:

•   Stocks

•   Mutual funds

•   Exchange-traded funds (ETFs)

•   Real estate investment trusts (REITs)

•   Bonds

•   Foreign currencies

•   Options

•   Futures

•   Cryptocurrency

Some brokers may allow you to trade on margin, meaning you can borrow money to execute trades. (Trading on margin and investing in certain asset categories may not be available for custodial accounts, however.)

You may be charged commissions or other fees to execute trades, but there are no limits on how much you can invest. That, in a nutshell, is how a brokerage account works.

Note, too, that a brokerage account is not the same thing as a retirement account. When you sell assets at a profit in a brokerage account, you may have taxes due or other tax impacts. You can buy and sell investments at your own pace, withdrawing money as needed.

With an Individual Retirement Account (IRA), you can invest in many types of assets, but certain items (such as collectibles) are disallowed in most accounts. IRA holders must wait until age 59 ½ to withdraw funds without any tax penalty (some exceptions apply, such as disability). Early withdrawals from a traditional IRA are taxed at your ordinary income tax rate, plus you’ll generally incur a 10% additional penalty. When deciding on a taxable brokerage account vs. IRA, choose the one that furthers your financial goals.

Recommended: Popular Types of Retirement Plans

Can Children Have Brokerage Accounts?

Children can have brokerage accounts, but they are not allowed access to the account’s money or assets. In almost all cases, such brokerage accounts are custodial, meaning the parent is responsible for managing the money until their child reaches adulthood.

Numerous discount brokers offer investment accounts for kids online. Some brokers have also introduced hybrid products for teens that allow them to save money, spend, and invest all in one place with the supervision of their parents.

If you’re looking for a hands-on way to teach kids about how markets work, a brokerage account could be a great idea. But if you want to teach them about money more gradually, a kids’ savings account might suffice for now.

It’s worth noting that there are benefits to investing early, too. The longer money is invested, the more opportunities it has to generate gains or value over time. That’s something parents may want to keep in mind when considering whether to open a brokerage account for a child.


Can a Child Have a Brokerage Account in Their Name?

A custodial account is technically in the child’s name, even though it’s controlled by the parent. So yes, a child can have a brokerage account in their name. Of course, they themselves can’t open the account without the help of a parent.

How to Open a Brokerage Account for a Child

Once you know how to open a brokerage account for your child, doing so isn’t too difficult.

The first step is choosing a brokerage that offers investment accounts for kids. Factors to consider in making your decision could include the range of investment options, how easy it is to access the account, and the costs or fees.

The next step is deciding which type of account to open. There are three possibilities to choose from when opening a brokerage account for a child.

Opening a Guardian Account

A guardian account allows you to invest money on behalf of your child. All of the money in the account technically belongs to you, as does any tax liability associated with the sale of assets in the account. You (but not the child) can withdraw money from the account for any reason. Once the child turns 18, you can decide whether to hand the money in the account over to them.

Opening a Custodial Account

With a custodial account, the parent opens the account but the assets in it belong to the child. You can direct investment decisions while the child is a minor, and any tax liability is assessed at their rate. Withdrawals are allowed only for expenses benefitting the child. Once the child reaches adulthood, they automatically become the owner of the account.

Opening an IRA Account

If your child has earned income from a part-time or summer job (even babysitting or lawn mowing) for at least a year, you might consider opening a custodial IRA for them. With a custodial IRA, you direct the investments until the child turns 18 (or 21 in some states). At that point, the account becomes their property.

One key distinction: The IRA has annual contribution limits, but other types of custodial accounts do not. Each year the maximum contribution is the amount equal to the child’s total earnings; in 2025 the amount is capped at $7,000. (If a child earns no money in a given year, the maximum contribution is $0.)

The Roth IRA, which holds post-tax dollars, may be a better choice for a kid than a traditional one funded by pre-tax dollars. The benefits of the traditional IRA — such as lowering your taxable income during your earning years — won’t help a young person very much.

Recommended: Roth vs Traditional IRA: Main Differences

Types of Brokerage Accounts a Parent Can Open for a Child

When opening a custodial account for a child at a brokerage, you have two options: a Uniform Transfers to Minors Act (UTMA) account and a Uniform Gifts to Minors Act (UGMA) account. Most states recognize both account types. With either one, you control the account until the child reaches the age of termination, which in some places may be later than the age of majority.

UTMA Account

UTMA accounts allow minors to hold securities without the creation of a separate trust. This type of account permits you to hold many types of assets, including:

•   Stocks

•   Bonds

•   Mutual funds

•   Real estate

•   Fine art

•   Precious metals

•   Patents

•   Royalties

•   Shares in a family limited partnership

The IRS taxes earnings in a UTMA at the child’s tax rate, up to a limit of $2,600 for 2025. Any gifts made to a UTMA on behalf of your child are irrevocable, meaning once you put the money in it becomes theirs; you can’t take it back out again. Any withdrawals must be used to pay expenses for the child, such as school tuition.

UGMA Account

A UGMA account is similar to a UTMA account in terms of tax treatment and who actually owns the assets in the account. The main difference between a UGMA and a UTMA account lies in what you can invest in. For a UGMA account, those are typically limited to stocks, bonds, and mutual funds. So if you’re choosing between a UTMA and a UGMA, it’s important to consider which types of assets you’d like to keep in the account.

Investing for Kids

A brokerage account can be a useful teaching tool for helping kids to grasp such concepts as:

•   How investing works

•   Compound returns and why compounding matters

•   The importance and value of saving money

Tips for Choosing the Right Broker

If you’re navigating how to open a brokerage account for your child for the first time, you may not be sure what an investment broker does or how to decide where to keep the account. When you’re seeking out the right broker, here are a few key questions you could ask as you narrow down the options:

•   Does this brokerage firm offer investment accounts for kids?

•   What types of brokerage accounts for kids are available?

•   Is there a minimum initial deposit to open the account?

•   What are the fees?

•   Which investments will I be able to trade in the account?

If you have an existing brokerage account for your child, consider whether moving it to a different broker makes sense. For example, you may want to move if you believe your current brokerage is charging too much in fees. If you do decide to switch, it’s easy to request a brokerage account transfer online.

The Takeaway

A brokerage account for your child would probably take the form of a guardian account or a custodial UGMA or UTMA account. Knowing what types of assets you intend to deposit may help you determine what kind of account works best for you.

Hybrid save-and-spend accounts designed for teens can help them learn about investing while under adult supervision. In all of these cases, the parent oversees the accounts until the child reaches adulthood.

FAQ

Can I open a brokerage account in my child’s name?

Yes, you can open a custodial brokerage account for your child in their name. Transfers to a custodial account are irrevocable, but you’ll have control of the account and make the investment decisions until the child reaches adulthood. In the meantime, the assets in the account will belong to the child.

Can I open a brokerage account for a family member?

Generally, you can open a brokerage account for a family member only if that person is your minor child. You are allowed to establish a 529 college savings plan on behalf of other family members, including siblings, nieces, nephews, or cousins.

Can I buy stocks for my child?

Yes, you can purchase stocks for your child. You can make the purchases through a custodial account. There are also financial apps that allow you to purchase full or fractional shares of stock for your child.


About the author

Rebecca Lake

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.



Photo credit: iStock/Morsa Images

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