If your child already has a savings account, you might be interested in exploring additional opportunities to help them build wealth over time. A custodial Roth IRA, managed by an adult, can be particularly appealing. It allows you and your child you to invest in a variety of assets, such as growth stocks and exchange-traded funds, which can potentially increase the value of your child's portfolio's. Over time, your child could build up a sizable nest egg, which would be completely tax-free after they reach 59 1/2.

Also, the Roth IRA could be useful even before your child reaches retirement, for instance by helping to pay for college expenses. While the benefits of a Roth IRA are compelling, there are two important questions you should consider before proceeding.

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Source Fool.com