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8 best investments for 8-year-olds

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Key takeaways

- By starting early, you can teach your 8-year-old useful money skills.

- Learning about investing can be a stepping stone for future financial education.

- There’s no one-size-fits-all approach to investing for kids.

What if your 8-year-old’s money could start earning on its own? It’s possible! The earlier you start investing your child’s gift money (or even their allowance), the longer it has the potential to grow. Even small amounts can add up to something big over time.

You don’t need to be a stock market expert to make this happen! Here’s how you can use the topic of investing to build financial know-how, even for 8-year-olds.

Why consider investing for your 8-year-old?

If you have a savings account that earns interest every month, great job! You’re already teaching your kids about the power of compound interest. Investing, on the other hand, is when you put that money into assets like stocks, bonds, or index funds, where it can shrink or grow over time.

Educating kids about investing has other benefits, too. Here are a few of them:

Financial literacy. Talking about investing and reviewing accounts together introduces them to the concept of long-term growth and investing basics.
Better money habits. Investing can help kids develop a savings-focused mindset which can benefit them for the rest of their lives.
Financial goal setting. Investments can help teach your kids about setting financial goals, like buying their first car, helping pay for college, or starting a new business.

8 ways to invest for your 8-year-old

Now that you know why, let’s cover how. We’ve compiled eight beginner investment ideas for your 8-year-old—some you can do on their behalf and others where they can get involved, too.

1. Custodial investment account (UGMA/UTMA)

Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) are parent-managed investment accounts that transfer to your kids when they’re older. The great thing about these accounts is that your child is the sole owner and beneficiary, and they can use the funds once they hit the age of majority, usually 18 or 21, depending on your state. These accounts are an excellent way for kids to learn how the stock market works.

2. 529 college savings plan

This state-sponsored investment plan lets you save money for future education expenses. A 529 plan allows your 8-year-old’s money to grow tax-free. These plans may also have additional state or federal tax benefits. It’s an excellent option for families who want to save early for future tuition.

3. Index funds & ETFs

Index funds and exchange-traded funds (ETFs) are baskets of assets that offer investors an easy way to diversify. They are more likely to be passively managed and often track a particular market index. You and your 8-year-old won’t have to pick specific stocks with these funds since they’re automatically diversified. It can be a low-maintenance, lower-risk way to get your kids started with investing. Greenlight’s investing app for kids is a great place to start!

4. Stocks in kid-friendly companies

One super-fun way to get kids interested in investing is by letting them pick a few brands they know and love, like Disney, Nike, or Apple. You can start small by buying fractional shares, allowing them to own a piece of their favorite companies without a big upfront investment. Investing in kid-friendly companies gives your 8-year-old hands-on experience with the stock market, helping them understand how businesses grow and how their money can work for them.

5. Bonds

Government-issued or savings bonds are considered safe, low-risk investments that can earn interest over time. This is a great option for teaching kids patience in investing because bonds aren’t subject to the stock market's volatility. Instead, they grow steadily over time, providing stability and a predictable return (when held until they mature).

6. Custodial Roth IRA

Has your 8-year-old earned income from acting, modeling, selling crafts, or family business jobs? If so, a custodial Roth IRA could be a great investment option! This retirement savings account grows tax-free, and you manage it until your child turns 18 or 21 (depending on your state). Contributions (but not earnings) can be withdrawn penalty-free at any time, making it a flexible option for big expenses like college.

7. ABLE account

An Achieving a Better Life Experience (ABLE) account is a tax-advantaged savings account designed for people with disabilities. Savings grow tax-free and can be used for qualified expenses like education, healthcare, housing, transportation, and assistive technology. It’s an option for families of children with disabilities who want to build financial security while preserving access to benefits like Medicaid or SSI.

8. Real estate investing

Though it may sound advanced, real estate investing doesn’t require buying physical property. Parents can invest in Real Estate Investment Trusts (REITs) through a custodial brokerage account, allowing kids to own a small piece of real estate without being landlords. REITs may generate passive income through dividends and can introduce kids to real estate investing in a beginner-friendly way.

Early education about investing for 8-year-olds is about more than money—it’s about giving them a financial head start and teaching valuable money habits for the long term. By involving your child in the process, you’re helping them build confidence in managing money.

To learn more, try our parent’s guide to investing for kids. Or make learning even more fun with Greenlight’s Level Up™, a financial literacy game designed to teach kids (and parents!) the basics of investing.

Want to raise savvy investors? With Greenlight, kids get real-world experience under your guidance. Try Greenlight, one month, risk-free.†