April 2013 Moms

Savings account for baby

Anyone know what the best type of saving account is to start for baby? We want her to have something with a good return where we're able to start depositing checks or gifts from family/friends. 

Re: Savings account for baby

  • What do you plan on using it for?  If you want to set up a college fund a 529 is best.  If you want to set up just a savings that LO can use when they are older for whatever, shop different banks and see what they offer for interest rates.

    We have a 529 and a savings account set up for LO.  DH set up the 529 so beyond the fact that it's to be used for educational purposes only, I don't know much about it.  The savings account is through our local bank.

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  • tmrchitmrchi
    500 Comments Second Anniversary
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    we're starting off with a regular savings account at our local bank, just waiting on his SSN so we can get it set up.
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  • I really think a 529 is best, especially if tuition is a big concern, which it is for us. DH did a lot of research into it and for now we're putting everything into the 529s for the kids.
    If you plan on setting up some other type of account, you may want to consider a trust fund rather than an account that is outright in LO's name.
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  • Actually our financial advisor recommended a ROTH IRA over the 529. If your kid doesn't go to college or gets great scholarships, etc., you can use the money however you want. That's how it was explained to me.
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  • My brother started a bank account for our LO and so we've just deposited any money that we've been given for her into that. We also plan on starting a 529 or ROTH IRA for her with our own money and keeping the savings account for other things.

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  • JSS1002JSS1002
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    image MKC12/22/2006:
    Actually our financial advisor recommended a ROTH IRA over the 529. If your kid doesn't go to college or gets great scholarships, etc., you can use the money however you want. That's how it was explained to me.

    ROTH IRA is definitely the best -- I contribute the max amount to mine every year!

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  • image JSS1002:

    image MKC12/22/2006:
    Actually our financial advisor recommended a ROTH IRA over the 529. If your kid doesn't go to college or gets great scholarships, etc., you can use the money however you want. That's how it was explained to me.

    ROTH IRA is definitely the best -- I contribute the max amount to mine every year!



    Yup! That's our plan.
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  • Regarding the Roth IRA, that's fine as long as you know there's an annual cap on how much you can contribute, and it's not much. Also grandparents, etc. cam contribute to the 529 but are constrained by the limitations of the IRA. A Roth IRA has a lot of rules and limitations.

    If your kid gets scholarships they can pass the 529 on to their kids and possibly their siblings.

    So you should consider how much you might contribute annually.
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