Child Savings Account

cv05 on 02/01/2017 - 09:56

Hi All,

I have two kids aged 12 and 10. For years we have been putting there age in dollars into a commbank savings account each week.

There is a few thousand in each account now, which prompted me to look for a better value deal. At the moment they earn 2.29%. Looking around I came across Bankwest which is offering 4.74% which I find amazing.

What do other parents do to create a small nest egg for their kids? I'm hoping by the time they are 18 they will be able to use it to go towards a house deposit, go towards UNI fees, buy a decent car etc etc.

Any thoughts on shares?

Financial

Comments

  • tomleonhart on 02/01/2017 - 10:43

    1/ Do you have a mortgage ?

    2/ If yes, does it have an offset account?

    3/ If yes, create sub account of the offset account and deposit the money there instead :)

    The bankwest option looks pretty good too ! I think BW is the way to go!

    • cv05 on 02/01/2017 - 10:54

      I was just replying to your post and went back to check something and noticed this edit. I think since I'm only paying 3.57% on my home loan which does happen to have an offset account the BW deal is a better option.

  • Diji1 on 02/01/2017 - 10:52

    Any thoughts on shares?

    Find an index fund that's structured so the investors own the fund (zero incentive for fees).

    • cv05 on 02/01/2017 - 10:59

      Thanks, I'll read up.

  • chazfg on 02/01/2017 - 13:05
    +3

    Bank West Kid's bonus saver account is limited to $250 deposit per month and at the end of the year the balance will be reset to zero.
    If you can deposit $250 per month, the balance at the end of the year, with compounding interest of 4.74% will be $3066, as opposed to $3000 (no interest). so the interest rate is effectively only 2.2%.

    Shares or managed funds if you are comfortable with them. I would stay away from education funds just because they lock away your money.
    Building up your own wealth and educate your kids on passive incomes is my own personal method.

  • payless69 on 02/01/2017 - 15:18
    +1

    always wise to check with the tax department if the extra reporting needed is worth the hassle eg accountant fees.

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