Where should I store my crypto?
When you buy cryptocurrency, you need to decide where you want to store your crypto. You can choose to take 'self-custody' of your crypto or you can use a storage service offered by crypto exchanges or brokers.
As an analogy, think about how you currently hold your fiat money - in cash, in a bank account, in a brokerage account, or somewhere else. If you lose money from your wallet, you have no recourse.
Similarly, the risk in taking self-custody of your crypto is if you lose your crypto, there is no recourse. The benefit of self-custody is the peace of mind that some people may have knowing that protection of their crypto wealth is not entrusted to some other entity.
Some investment tools and products require that your crypto is stored in a particular account. For example, when you buy crypto through UNest, your holdings will automatically be stored in an account managed by our partner, Bakkt. By storing crypto in this way, parents can buy crypto with the knowledge that their holdings are safeguarded and available to their child when they turn 18.
Though unlikely, it is possible to lose funds stored on a crypto exchange or with a crypto broker. In the event that funds are stolen in a hack, your crypto is not insured by the Federal Depository Insurance Corporation (FDIC). Many American citizens are used to operating with the knowledge that the money the deposit in a checking account is FDIC insured. Remember, crypto exists outside the traditional financial system, which means you are not guaranteed repayment of lost funds.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
Don't just take our word for it
Hear what trusted money experts say about why UTMA and UGMA accounts can be a smart way to invest for a child’s future.
There are some tax advantages to using UGMA and UTMA accounts… Since they’re in your child’s name, the accounts will be taxed according to their tax bracket… There are no contribution limits on UGMA and UTMA accounts.
Dave Ramsey
Personal Finance Expert
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Investing for your kid’s future
Dave Ramsey
Personal Finance Expert
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...you could consider opening an account where you can dive deeper with the kids by your side. The easiest way to do so is to open a custodial account, known as an UGMA ... or UTMA ... account.
Jill Schlesinger
Emmy winning Business Analyst
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Straightforward “starter” investing account for kids
JILL SCHLESINGER
Emmy winning Business Analyst
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You can give children money that can accumulate somewhat tax-free over time... I love them (UTMAs) because they were like, trusts that you didn't need lawyers to create.... I think it's one of the better tax breaks around though. I know hunting for tax breaks may not sound very exciting, but that's how you take care of your family.
Jim Cramer
CNBC Host
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Give children money that can accumulate over time
Jim Cramer
CNBC Host
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