Parenting

Savings Account for Kids

My MIL set up savings accounts for the kids at BofA but is closing her accounts along with theirs because of all these fees I guess they want to charge. She is turning the money over to my DH and we were a little unsure of what to do. Someone told him to get CDs but I was just planning on opening a savings account at ING. Is that the best option?
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Re: Savings Account for Kids

  • I just noticed this board for the first time today but I'll jump in and say that yes I would put it in an online bank. CD rates are so low that even two year CDs are about equal with an online savings bank. Why tie up the money in a 5 or 10 yr CD at the worst rates the country has ever seen? If the rates were better I would put it in a CD rather than a savings account.

    Do you have an account at a mutual fund company? If the money is for say 15 yrs away then why not invest it for them? In a 529 if it's meant for college?

  • You could also check with your local bank and see what the rates are for their "custodial" bank accounts.  With a custodial bank account both the child's name and the parents' names are on the account and you have control of the account.
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  • We opened a Roth IRA for the kids in DH's name. It's for college, i like it better than a 529. DD has a small savings acct at our credit union, but pretty much all the money she gets and out monthly amount goes to the IRA.
    DD 7.28.06 * DS 3.29.10
    image

    Christmas 2011
  • Depends on when you expect your kids to dip into the money.    We set up a small savings account that he puts $2 of is $3 when he gets cards from family.  When he's older and asks for a video game or whatnot, he can use his savings account. 

    DS also has an IRA set up for larger contributions from my parents.

    image

    David "BD" 2/8/07 Spencer 9/12/11
  • My credit union allows me to set up a custodial account that pays 7% APY up to the first $500 which is good if you would like easy access to the money. Otherwise, I would recommned either a 529 account and/or an online savings account like ING.

     

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