FAQ

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What is UNest, and how does it work?

Why should I open a UNest account?

UNest makes it easy for parents to invest in their children’s future with a simple, flexible, and tax-advantaged custodial account for minors. 

What can I use the funds I save in UNest for?

UNest is more flexible than other saving accounts that can only be used for education. Funds saved can be used across any of your child’s life events like college, their first car, down payment on the house, wedding day or any other important milestones. 

What are the tax benefits of a UNest account for my child? 

In 2024, up to $2,600 in annual earnings in a UNest Investment Account for Kids may grow in a tax-advantaged way. The first $1,300 of the earnings may be completely tax-free. The next $1,300 is taxed at the child’s tax rate. Anything exceeding $2,600 is taxed at the parents’ tax rate. This threshold is only applicable to gains in the account and not to the original contributions.

Where is my money held?

Investment accounts are held with our trusted partner and custodian, Apex Clearing Corporation, a third-party SEC registered broker-dealer and member of FINRA and Securities Investor Protection Corporation (SIPC). This means the investments in your account are protected up to $500,000 in total. 

When can my child access the money in their UNest Investment Account for Kids?

Children can access funds in their UNest account when they reach adulthood. This may be anywhere from 18 to 25. Your state of residence will determine which rules apply to you. 

Is my account insured?

All UNest investment accounts are insured by Securities Investor Protection Corporation (SIPC) for up to $500,000 (up to $250,000 for cash claims).

Why invest in a UNest custodial account instead of a 529 plan?

Both 529 plans and UNest custodial accounts provide a great tax-advantaged way for parents and others to help save for a child’s tuition and other educational expenses. UNest’s Investment Account for Kids offers a significant benefit to parents that are looking for a flexible way to save for all the future life stages your child will experience. This may or may not include education. 

In contrast to 529 plans that can only be used for qualified educational expenses, you can use the funds you invest in UNest for any expense that benefits the child named on the account. If an account holder uses funds from a 529 plan for non-education related expenses, they lose tax advantages and earnings are subject to a 10% penalty. 

Is my money safe? 

Security is a priority for UNest. UNest provides the highest levels of security to ensure your information and data is safe. All accounts are protected with 256-bit SSL encryption and continually monitored for extraordinary or suspicious activity by our Compliance team.

In addition, investment accounts are held with our trusted partner and custodian Apex Clearing Corporation, a third-party SEC registered broker-dealer and member of FINRA and Securities Investor Protection Corporation (SIPC). This means the investments in your account are protected up to $500,000. 

Is UNest an investment advisor? 

Yes, UNest is a registered investment advisor (RIA) with the U.S. Securities and Exchange Commission (SEC).

What is UTMA/UGMA?

They are investment accounts with a custodian for the minor. The Uniform Gift to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) allows the custodian, such as a parent, grandparent, relative, or friend, to open an account for a beneficiary, such as a child or grandchild. When the custodian sets up the account, the custodian picks what age the beneficiary will take control of the account. This is normally between 18 and 25, depending on the state the custodian resides. This investment account for children may receive up to $2,600 in annual tax benefits on the earnings portion. UNest Investment Account for Kids leverages the benefits of UTMAs.

Which is better, UGMA or UTMA?

The biggest difference between UGMA and UTMA accounts is that UTMAs allow for more types of assets. While UGMA accounts are typically limited to things you find in most IRAs like stocks, bonds, and mutual funds, UTMAs can also hold things like real estate, art, patents, and even cars.

How will the funds be made available to the child?

On reaching the age of majority, usually 21 years, the minor is entitled to all assets held in the account. UNest will convert the account to the individual brokerage account in the name of the child and your child will be able to continue saving and investing for as long as needed if he/she doesn’t need funds for any immediate needs.

What happens with the account if the custodian of the account dies?

If the custodian of the account dies, a new custodian must be named. The custodian may name a successor upon death by reaching out to UNest customer support. If a successor is not designated and the minor is over age 14, the minor may appoint a successor using a notarized letter.

If something happens to the minor before reaching the age of majority, the account becomes part of the minor’s estate. If the minor does not have a will, the parents would most likely inherit the estate.

Opening Accounts

What do I need to open a UNest Investment Account for Kids?

To open a UNest account you need the following information for both you and the child:

  • Legal name
  • Date of Birth
  • Social Security Number or ITIN
  • Address of residency
  • U.S. Citizenship or legal residency information

You also need to connect a U.S.-based, verified, personal bank account in the name of the custodian.

Why do I need to provide my social security number? 

Financial institutions, like UNest, use your Social Security number to verify your identity, your child’s identity, and to report your interest and investment income or losses to the IRS. It’s important to note that this information is securely obtained and encrypted in our system with restricted access and additional security measures to keep that information safe. 

Can I open the account if I (or the child) is not a US citizen?

If either you or the child are not a U.S. Citizens, you both need:

  • To have a residential U.S. address
  • Have a Social Social Security Number or ITIN
  • Permanent Resident Card holder (Green Card)

How much does it cost to open a UNest account? 

Our goal is to democratize investment for all and we pride ourselves on empowering parents to invest in their children at a much lower cost than can be found with most traditional financial advisors. See our pricing for current options.

Who can I open an account for?

You can open an account for any child (minor) under the age of 17. The child does not have to be related to you. 

Can I open an account for each of my children?

Yes! And you can manage one or multiple accounts easily through UNest’s iOS or Android apps. 

How do I add a child?

After you create the first child’s account, you’ll see a button to “Add Another Child” on the Home screen within the UNest app.

Can I open an account for a future child?

Yes, you may open an account for an expecting child in the name of the custodian. Once the child has a Social Security number and that information is provided to UNest, an account will be created for the child and the money moved to the child’s account.

Can I open an account for a child that is not mine?

Yes, you may open an account for any child that you would like to invest for. You just need their legal name, date of birth, and Social Security number.

Can I open more than one account per child?

You can only open one account per child, but other people can also open accounts on behalf of the child and act as the custodian to the account.

Contributions

What is the minimum amount I can contribute each month?

The minimum contribution is $25 per month.

Am I required to set up a monthly contribution when I sign up? 

UNest recommends to start with disciplined and consistent monthly contributions to keep you on track with your savings goal. UNest makes every effort to democratize and simplify access to investing for your children’s future. We start you off on this plan for as little as $25 per month to help you achieve your goals for your children. You may choose to increase this monthly contribution at any time, or temporarily pause the contribution.

What is the maximum annual contribution?

In 2024, you can contribute up to $18,000 per individual ($36,000 for a married couple) to a UNest Investment Account for Kids / UTMA each year free of gift tax.

Can I add money to my account at any time?

In addition to recurring (monthly or twice-a-month) contributions, you can also make one-time deposits at any time.

How will the contribution be made? 

After you open an account, you’ll be asked to securely connect a verified bank account that you own. Once you choose your funding source and it’s verified, funds transfer from your bank account via ACH for one-time deposits or set monthly contributions. 

How do I connect my bank account to UNest?

You can securely connect your bank account via instant account verification with our partner, Plaid.

What are some additional ways to receive funds in my account?

There are several ways to receive additional funds in your child’s account:

  1. UNest Rewards. Look for partner offers in the UNest app – when you shop with the brands you love, you can earn investments in your child’s account.
  2. Refer friends. Share your referral link to other friends that would love to start a UNest account for their children. You’ll each receive a $50 reward when they open and fund a UNest account for at least 60 days. You may read the full terms and conditions here.

Can I pause contributions at any time, and for how long?

Yes – You may temporarily pause your recurring monthly contributions via the UNest app.

Are gifts from family and friends tax-deductible?

No, these are considered cash gifts for your children that are set aside for investment into their UNest investment account.

Can I change the bank I use to make contributions?

Yes. You can update your funding source anytime in the UNest app. 

Home screen → “My Profile” → “Bank Details” → “Change Accounts” button

Can I roll over a 529 or another custodial account into my UNest account?

Due to 529 legal requirements, you cannot rollover 529 funds into your UNest account automatically. However, you can still open a UNest UNest Investment Account for Kids and invest in the child you care about with greater flexibility compared to 529 plans. There are no restrictions on the number of investment accounts you can have for the same child.

Investment Options

How is my money invested?

UNest offers various investment strategies, ranging from very conservative to very aggressive. Our portfolio offerings include several age-based options as well as socially responsible options that start at a more aggressive level and become more conservative as the child gets older.

All of UNest’s portfolio options invest in low-cost ETFs. To see which portfolios you’re currently investing in, and the specific investments for each:

  1. Open the UNest app and log in to your account.
  2. Tap on the child’s account from the Home screen (each child’s account can have a different portfolio option).
  3. Tap on the “Portfolio” link.

From there you can learn about your current portfolio or select a new option.

What investment options are available?

UNest currently offers eight portfolios:

  • A conservative option that invests in fixed income and bond ETFs.
  • Three age-based options (conservative, moderate, aggressive). Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older. The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.
  • Three socially responsible age-based options (conservative, moderate, aggressive). Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older. The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.
  • An aggressive option that invests 100% in equity ETFs.

Can I create a custom investment portfolio in my account?

Unfortunately, this is not a feature UNest supports.

Can I change my portfolio selection?

Yes, you can change which model portfolio your child’s account is invested in at any time. Bear in mind, there may be tax implications to doing so, as we will need to sell your investments to invest them in the new portfolio.

Taxes and Financial Aid Eligibility

What are the tax benefits to a UNest Investment Account for Kids? 

In 2024, up to $18,000 per individual ($36,000 for a married couple) can be contributed free of gift tax. In addition, up to $2,600 in annual earnings in a UNest account may grow in a tax-advantaged way. 

Are my own contributions tax-deductible?

Contributions to UNest Investment Account for Kids accounts are made with after-tax dollars so as the donor (you), there is no income tax deduction. 

Are the earnings taxed?

In 2024, up to $2,600 in annual earnings in UNest account may grow in a tax-advantaged way. The first $1,300 of the child’s unearned income is tax-free. The next $1,300 may be taxed at the child’s tax rate. Anything exceeding $2,600 is taxed at the parents’ tax rate. This threshold is only applicable to gains in the account and not the original contributions.a

How can I claim my tax benefits?

UNest will provide you with a 1099 form. When filing your taxes, you are able to claim your child’s income on IRS Form 8814 and attach that to IRS Form 1040. The IRS has limitations on these claims here. UNest does not give tax advice, and we recommend talking to a tax professional about your specific situation. 

Will I be penalized when I withdraw money from my investment account?

No, there is no penalty to take the money out. Remember, though, that any funds you withdraw must be used to benefit the child named on the account. Check with your tax professional to see what requirements you may need to meet.

Gifting

What is Gifting?

UNest Gifting is being redeveloped and is currently unavailable. We will let you know when we launch our next version.

UNest Rewards

What is “UNest Rewards”?

UNest Rewards is a way that you can earn cash into your child’s UNest Investment Account for Kids by purchasing products and services with our partners via the UNest app. 

What information do you share with your partners?

We share the bare minimum with our partners in order to confirm that you are eligible for the reward. For our rewards transactions, we pass them an alphanumeric code when you click on an offer. The partner then returns a list of all the alphanumeric codes that completed an offer, and we match that to our internal database to pay out your reward. By using this methodology, we do not have to pass them email, phone number, or any other personal information.

How long will it take to receive my reward?

It may take up to 60 days for rewards to reach your account. In order to be eligible for the offers, you must have a funded UNest account.

Invite Friends

What is the reward for referring UNest to my friends?

As a reward for referring other parents to UNest, we will deposit $50 into both of your UNest accounts after your friend’s account has been funded for at least 60 days. Please read the full terms and conditions here.

Fees

How much does it cost to invest with UNest?

Our goal is to democratize investment for all and we pride ourselves on empowering parents to invest in their children at a much lower cost than can be found with most traditional financial advisors. See our pricing page for current options.

What is the fee if I have multiple children?

UNest’s pricing is flat-rate per-user. A user may open an account for multiple children under the same subscription. See our pricing page for current option.

Bank Connections

Can I use an online bank to make contributions?

Yes. We use secure online instant verification with our verification partner, Plaid, to verify your bank account. Over 2,000 financial institutions are supported, and they’re continuously working on adding more. 

What if I experience a problem connecting my bank?

We recommend that you first login to your bank’s online site to check your credentials are correct. While you may try again on UNest, multiple attempts in a short time period with invalid credentials can lock your bank account, or there may be a cool down period before trying again. If you’ve checked your credentials and you’re still receiving an error, your bank may be experiencing an outage or downtime. We rely on our trusted verification partner, Plaid, to securely verify and connect your bank account you own. While Plaid works with thousands of financial institutions, some banks may have occasional connectivity issues. If you continue to experience an issue, please contact support in your UNest app for help.

Closing Accounts

How do I close my account?

To close your account:

  1. Open the UNest app and log in to your account.
  2. On the Home screen, tap on the child’s account that you want to close.
  3. From the child’s dashboard, tap the “gear” icon in the upper right of the screen and choose “Withdraw Funds”.
  4. When you’re prompted to select the amount to withdraw, choose “Close Account.”

Your account will be closed and funds returned to your connected bank on file, typically within 10-15 business days. There are some exceptions that may take longer or require additional verification.

Is there any holding period to take my money out (withdraw)?

In some cases there may be a holding period to receive your returned funds. Your account may be flagged for review for a variety of reasons, including for newly created UNest accounts, recent deposits or received new gifts, or if you have recently changed your connected bank account.

Can I withdraw whenever I want? Are there penalties?

Yes, you can withdraw, penalty-free, from your UNest Investment Account for Kids whenever you want. Remember, though, that any funds you withdraw must be used to benefit the child named on the account. Check with your tax professional to see what requirements you may need to meet.

UNest Crypto

What is UNest Crypto?

UNest Crypto is a way for you to have the ability to buy different cryptocurrencies for your child if you choose, in a separate account, alongside your traditional investments and is included as part of your UNest subscription. UNest Crypto is powered by Bakkt Marketplace and UNest Crypto receives a revenue share as part of this relationship.

Who is UNest Crypto Designed For?

We created UNest Crypto to serve parents and guardians that want their children to gain direct exposure to the demand for digital currency. At this time, UNest Crypto operates throughout the United States; however, due to regulatory restrictions, the Bakkt platform, and by extension, UNest Crypto, is not currently available to residents of Hawaii.

What cryptocurrencies can I invest in?

Currently UNest Core members are able to purchase Bitcoin, Ethereum, and other popular digital assets in the UNest app. Availability of particular cryptocurrencies may vary, depending on a member’s location. Before investing in a particular cryptocurrency, we encourage you to learn more about each project by reviewing the ‘about’ and ‘key stats’ sections, as well as researching the risks and benefits of each project.

How much does it cost to use UNest Crypto?

UNest Crypto is available with your UNest subscription at no extra cost.

Does UNest Crypto have any fees?

No, we do not charge fees or commissions for individual purchases of cryptocurrencies. However, our partner, Bakkt, charges a spread or markup on any buy or sell order submitted, in order to cover the costs associated with facilitating the transaction. UNest receives a revenue share from Bakkt as part of our relationship.

Is investing in crypto risky?

Cryptocurrencies like Bitcoin and Ethereum are known for experiencing rapid increases and decreases in price (i.e. volatility). Uncertainty surrounding future price movements, demand for crypto, expansion of use of each project’s technology and government regulation drives investors in and out of the market (resulting in the price going up and down). Your goals and preferences as an investor will ultimately decide whether an investment in crypto is right for you.

Does UNest hold my crypto investments?

UNest does not hold your crypto investments. We have partnered with Bakkt, which executes all orders for cryptocurrencies and serves as the custodian of any funds you add to your UNest Crypto account. UNest does not currently provide a crypto wallet.

How is cryptocurrency taxed?

We encourage you to consult a tax professional about your personal financial situation. That said, crypto transactions are taxed similarly to property transactions. If you buy crypto using the UNest app and hold that crypto, the transaction will not be taxed until you realize a capital gain or loss. In the event that you sell crypto for a gain, the IRS will consider this a taxable event. However, if you sell crypto for a loss, then you could be entitled to a tax deduction. UNest does not provide tax advice. We suggest talking to a tax professional about your specific situation.

Will I get a tax document?

If your accounts require a tax document, UNest and Bakkt will provide you with a 1099. These are typically provided in the first few months of the following year.

Can I transfer my crypto account to and from UNest?

If a UNest member decides that they want to sell a portion or all of their crypto investment, the resulting cash will be automatically deposited in your UNest brokerage account. From there, you can withdraw that cash. Currently, you cannot transfer your crypto holdings directly from your UNest Crypto account (to an application like Coinbase or a wallet like Metamask).

Where can I learn more about crypto?

Visit the ‘Learn’ tab inside the UNest app to access more content about the crypto industry.

Are the Crypto accounts UTMA/UGMAs?

UNest Crypto accounts are not UTMA/UGMA accounts. They are individual brokerage accounts in your name and are treated as such for tax, reporting and legal purposes.

Have a question for our team?

Email us at support@unest.co and our team will help.

Any and all offers related to cryptocurrency are made by UNest Crypto, LLC. This is not an offer to buy or sell any securities or invest in any particular strategy. This offer is not affiliated with UNest Advisers, LLC or UNest Securities, LLC.

Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance. Crypto Investing involves significant risk, including but not limited to market swings, flash crashes. Cryptocurrency markets and exchanges are not regulated with the same controls and protections as equity trading.

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