UNest Review 2024: A guide to invest in your child future

Jeremy Biberdorf
By: Jeremy Biberdorf
Aug 04. 2023
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4.6 rating based on 5 ratings

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In A Nutshell: College graduation is a significant milestone that brings forth a mix of emotions—a closure to one chapter and the beginning of something fresh. However, as any freshly graduated college student knows, it also signals the onset of the daunting task of repaying their student loans.

The rising cost of college tuition means that numerous graduates are burdened with student debt for years, often even after starting their own families. This has prompted new parents to explore ways to prevent their children from facing the same predicament in their daily life..

Specialized accounts like the 529 plan and UGMA/UTMA were introduced to cater to this need. But what exactly is a 529 plan, and how does it compare to UGMA/UTMA? Moreover, is UNest the ultimate solution for parents seeking financial security for their children’s education? In this UNest review, we’ll delve into these questions and more.

Service TypeFees
Custodial Investment AccountVariable
Pros & Cons
  • Easy sign-up
  • Five portfolio options
  • Lower Marginal tax rate
  • Contribution to account is easy
  • Can be used for other expenses
  • Expensive monthly fees for small accounts
  • Account can reduce the chance of financial aid
  • Fewer tax advantages than 529 account

What is UNest?

UNest is a company and mobile app that is designed to help parents save for their kids’ future. The core idea behind UNest revolves around a custodial account, which allows you to manage savings for your child until they reach the age of majority, typically between 18 to 21 in most states.

Once they hit that age, the account ownership is transferred to your child, who can use the funds as they see fit. Until your child is ready to leave home for college, you remain in charge of the account. This means making regular contributions, deciding how to invest the money, and making eligible withdrawals.

Just remember that the funds in a custodial account can be used for many different purposes for your child. While it is primarily used as a college savings plan to cover educational expenses, it can also be used to buy a first car or even make a down payment on a house.

UNest offers a custodial investment account called the Uniform Transfers to Minors Act (UTMA) account. This account is similar to a Uniform Gift to Minors Act (UGMA) account but has a few differences. Here are the differences:

  • Typically provide a more extensive range of investment options compared to UGMA accounts like real estate or art investments on top of standard ones like stocks and ETFs.
  • Smoothly converts into an individual brokerage account under the child’s name.

External UNest Review & Ratings

Money Made5
Apple App Store4.7 from 3,695 reviews
Google Play4.1 from 2573 reviews

Here are some reviews from traders who have experienced the platform firsthand:

“The app is simple and robust. Helps me to save money for my child and has great customer support! They respond to me quickly, very polite and are ready to help. Thanks!”
“I really, really love and appreciate this app…. I set up an account with the intention of accumulating savings for my daughter… Funds are pretty tight. literally paycheck to paycheck- so it’s not easy to put back money …. But the beauty of this app is that it autodrafts a little bit from all of my deposits (on a basis I prescheduled).. I have already accumulated a couple hundred dollars in a few months time, effortlessly. By the time she is able to access it, it’s gonna be racks on racks!!”
“Love the app. It’s simple, nice design, happy it’s not confusing but quite the opposite, it’s user-friendly. My husband and I have been looking for an app and service like this for several years. Importantly, it helps to save for college for our two kids, and we can monitor our money grow. Very nice.”
“I know what it is like to graduate with a mountain of student debt and I don’t want that for my 3 boys. I couldn’t wait for this app to be made for android users. Now I can easily save for each of my kids and it is so easy to have others contribute to their plans. The app is easy to use and visually appealing. I did have an issue entering my correct birth date but it was easily resolved within 24 hours by their tech support. I would totally recommend this app.”

Features of UNest

UNest offers an array of five portfolios, all of which are based on various Vanguard ETFs. The two principal portfolios are the Conservative option, which focuses on fixed-income and bond ETFs, and the Aggressive option, which goes all-in with 100% equity investments through Vanguard equity index ETFs.

If you are looking for a more dynamic approach, there’s the age-based investing option, which employs three portfolios: conservative, moderate, and aggressive. This approach starts with an aggressive portfolio when your child is younger, gradually adjusting its asset allocation as your child ages to become more conservative.

The objective is to maximize returns while avoiding any possible risk. UNest also provides the flexibility of creating a custom portfolio upon request.

The service operates similarly to a robo-advisor like Betterment or microsaving apps like Acorns, where you invest in portfolios without direct control over individual assets. Apart from monthly contributions and receiving gifts from friends and family, UNest offers several other attractive features for investing and earning rewards:

  • Crypto: Although the crypto program is currently on a waitlist, UNest plans to support crypto investing in the future. While specific assets aren’t confirmed, popular choices like Bitcoin and Ethereum will likely be included based on teasers from the company.
  • Rewards: The app’s shopping section lets you shop at over 150 brands and earn cash-back rewards.
  • Referral Program: UNest regularly runs referral promotions, such as the “give $15, get $15” promo, where you receive $15 for inviting new members to the app. Past promotions have even rewarded up to $50 for successful referrals. You can check the app for details on the latest referral promotion.

It’s worth mentioning that while the UNest Crypto feature may appeal to some, investing in cryptocurrencies can be highly volatile. The other investment portfolios may suit your needs if you prefer a more stable and traditional approach to building your child’s future wealth.

Breakdown of Pricing

UNest offers two subscription plans for its services. The regular account, supporting one custodial account, costs $2.99 per month, equivalent to $35.88 per year. Alternatively, you can opt for UNest Family, priced at $5.98 per month, which supports up to five children but offers the same features as the regular plan.

At first glance, the cost might seem budget-friendly, but it’s essential to consider UNest’s fees relative to the assets under management.

So let’s say you contribute a minimum of $25 monthly; your total annual contribution would be $300 to the account. With the $2.99 monthly fee, you’d be paying a staggering 11.96% of your contributions as fees for UNest’s investment services. This percentage is remarkably high, making UNest more suitable for more significant account balances, in our opinion.

How Does UNest Work?

The UNest Tax-Advantaged Investment Account offers a fantastic opportunity to grow your money through investments while securing a bright future for your children. The funds are handed over to them once they reach the majority age, typically between 18 and 25.

The best part? You can open an account for a minor who’s unrelated to you as long as they meet the age requirement.

The account sets itself apart from traditional college savings plans because of its flexibility. With no specific restrictions on how the funds can be used, giving your child more freedom in utilizing the money gives it this flexibility.

On top of this, some essential tax advantages come with it. When contributing to the UNest account, you can contribute up to $15,000 annually ($30,000 for married couples) without incurring gift tax. The first $1,100 in annual earnings (on contributions) also enjoys tax-free growth.

However, beyond that, the next $1,100 is subject to the kiddie tax, and any further money earned is taxable at your applicable rate. Getting started with UNest is simple:

  • Step 1: Download the UNest mobile app.
  • Step 2: Choose the investment option that suits your preferences and risk tolerance.
  • Step 3: Select your monthly or bi-weekly contribution amount.
  • Step 4: Begin investing and use the user-friendly mobile app to track your progress and make any adjustments as needed.

Who is UNest For?

UNest is a user-friendly app with an affordable entry cost, making it an excellent choice for anyone. What sets UNest apart is the ability of those who might not meet the requirements for other long-term investment plans.

Along with that, it also avoids excessive questions and offers flexibility when it comes to investing your hard-earned money. Unlike more rigid plans, UNest allows you to easily adjust or even cancel your plan and withdraw the money you’ve saved for your child.

UNest Review – Final Thoughts

So, if you’re looking for a reasonably easy way to plan for your children’s future, UNest could be an excellent place to start. It eliminates some of the complexities that come with financial planning and offers parents peace of mind regarding their kid’s futures. So click here to discover the benefits of UNest today and take a step closer to securing your loved one’s financial well-being.

Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He’s a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.