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South Florida Babies
CesEve99
member
savings acct for your children
CesEve99
member
do you guys have an acct strictly for them in a bank somewhere? an acct where it can't be touched but deposits can be made at any time and the acct has a good interest rate?
mady's piggy bank has had deposits constantly made from her birth until her recent 2nd bday and not another penny fits in it. i hate to have that much money hanging around the house and for her bday she got checks that need to be deposited also.
what banks or type of accts do you guys use for your lo? can u fill me in on details, we need to make a decision by end of this week already.
thx
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Re: savings acct for your children
We don't have a separate account for her yet. We have gotten a lot of money for her as gifts from people so what we do is we put it into our money market account so that it will collect interest. We do keep a running total of how much she has. We will open a savings account for her at some point though. We also have quite a few savings bonds for her already and we have those in a safe.
We also have the pre-paid college for her, not sure if that counts.
how does that work exactly? i can xfer to and from my bank (which is chase)? what int rate does it offer?
the mm acct that you have is with what bank? does it offer a locked int rate for a couple of yrs?
We opened one for Emma shortly after she was born at our regular bank (Chase). It's a special kind of account under the Uniform Transfer To Minors Act which has special rules. This website shows some of the pros and cons: https://www.wellsfargoadvantagefunds.com/wfweb/wf/college/options/ugma.jsp
What stuck out to me are the tax benefits and that the child can use it for whatever purpose once they are of age. We also enrolled in Florida Pre-Paid, so this is not considered her "college fund"...it's just money we are putting away for her to use as an adult, whether it's for a downpayment on her first home, to buy a car, etc. One of the "cons", depending on how you look at it, is that that money can never be used for anything other than for that child's benefit. So once you put that money in, you can never change your mind and take it out for something unrelated to the child. If the IRS audits you and sees that you've been using it for other purposes, you can get in trouble.
Good luck!
We're with Wachovia and that's what we use as our savings account, but it collects interest, its not a super high rate because of the type of account.
We also have CDs that have a higher rate and those are a locked in rate, but you can't add or remove money until its time to renew the rate. We have ours renewing on a yearly basis, you could look into that.
ING doesn't have a banking center that you can go to in person. Everything is handled online. When I set up his ING savings account, I had to connect it to our checking in order to make deposits. It's really easy to transfer money over. I just go to the ING website, log in and since my banking info is there already, I just put how much I want to transfer over. I have not transfered anything out of his savings yet but I imagine the process is just as easy. According to the ING website, with an ING orange savings you yield an annual percentage of 1.10% compared to a money market account which yields 0.31% and a regular savings account 0.26%. I'm not too familiar with all this money stuff but I remember coming on here and was recommended the ING savings due to the higher interest you collect. So far, we are happy with it.
ETA: we also do Florida pre-paid college for him so this savings account is for other stuff he may need when he's older- buying a car, etc
fyi: https://www.moolanomy.com/1333/how-to-find-best-high-yield-savings-interest-rate/
i just googled and found that link, thought it would be useful for others in my position. im currently calling amex bank and discover bank for more info.
I opened a custodial account with our bank for Madison. It's not great interest (not like iNG) but it's convienent and easy to make deposits.
We have an ING account, and it does earn better interest than other accounts but I just choose to open her savings at a local branch.
This exactly! We also have done FL prepaid for her for tuition and local fee plan - we couldn't afford and more than that.
We opened a secondary account at Wachovia and deposit all of his monetary gifts and piggy bank $$ to that account.
I was wondering also what to do since DS has money from the commercials he has done.
I have an ING Direct account for myself but it never occurred to me to open one for DS. Do you guys know how will this affect DS with scholarships in the future? I was going to open a regular savings account for him but I read somewhere that sometimes its not a wise decision because it can affect how much financial aid/scholarships he will be able to get when he will go to college.
I have never heard of this. I'm not quite sure this is right.
Rules are always changing with scholarships. I wouldn't worry about it too much now. By the time he reaches high school you might want to transfer the money around if needed. Usually you want to make the student look really poor to get NEED based scholarships or funding but you have to make the child look independent of the parent's money completely (which isn't always easy). If you are not going to try to look like you are cutting your child off - it won't matter any way. FASFA and scholarships "rules" will change at least 20 more times before our kids get to high school - I wouldn't worry about it too much.
Thanks! You are totally right! I think I am just going to open an account for DS. DH wanted to put the money in our savings and keep track of it but this makes me nervous because I rather have a separate account for DS. I don't want to forget the amount and then take his money by mistake. Thank you!