Our son is 5 years old. We want to put some money away for his education as want to go private high school.
We want to put 100k in savings, what is the best option please?
Any Good Deal for Saving Account Please?
jiaqi518 on 28/12/2018 - 12:01
Comments
It won’t handle the dollars they need.
Don't forget tax is 66% over $416 income for kids so make sure you structure the plan appropriately.
https://www.ato.gov.au/Individuals/Investing/In-detail/Child…
If a child makes more than $420 per year a bank will withhold 47% if no TFN is provided.
Just create a TFN for the child and the bank won't withhold any tax, provided the interest earned is within the tax free threshold
Unearned income for a child is taxed higher than usual, and does not have the benefit of the tax free threshold.
https://www.ato.gov.au/individuals/investing/in-detail/child…Good point, thanks for the info!
looks like what I said only applies to earned income, where as unearned income is taxed at a super high rate to prevent people avoiding tax
Just don't forget the tax take on "unearned income" by kids is pretty heft.
do you have mortgage ? put in HL
you got $100k in spare savings but you can't afford to have a financial advisor? some people sheesh
Informative response. Society thanks you.
Depending on your family tax affairs, maybe consider insurance bonds.
https://www.smh.com.au/money/investing/how-to-invest-for-chi…I think you should read the above, then ask your accountant whether there are any implications you haven’t considered.
Be wary if your accountant suggests trusts or other complex tax minimising ideas, they often benefit the accountant more in fees than they save in tax.Our son is 5 years old. We want to put some money away for his education as want to go private high school.
We want to put 100k in savings, what is the best option please?So approximately 6 years before he goes to high school.
Instead of a savings account, perhaps invest in indexed funds or shares from Listed Investment Companies. e.g AFIC. They've reported ~5.8% p.a growth in the last 5 years so if you invest $100,000, you should gain $32,000 after investing for 5 years (which is close to a years worth of tuition at your top end private schools or a few years tuition at an average private school).
Don't put all your money in one type of investment. Perhaps some in blue chip shares and some in indexed funds. That way you are more likely to get mid to high returns. With that amount of money, I don't think it's worth leaving in a savings account which will yield low returns. e.g if you leave it in a savings account giving 2% p.a return, then you will get approx $10,000 return after 5 years.
The top 7 savings accounts* by maximum variable rate
* HSBC Serious Saver Account - 3.10%. This is an introductory bonus rate applied to your balance for the first four months, to give your savings a kick-start.
* RaboDirect high-Interest Savings Account - 3.05%. This is an introductory bonus rate applied to your balance for the first four months, to give your savings a kick-start.
* Citibank Online Saver - 3.05%. Available for 4 months, reverting to a rate of 1.70%
* UBank USaver Account - 2.87%. When you deposit $200+ each month.
* ME Online Savings account - 2.85%. When you link to an ME Everyday Transaction account and make a weekly purchase with your Debit Mastercard using tap & go.
* ING Savings Maximiser - 2.80%. When you link to an ING Orange Everyday bank account and deposit $1,000+ each month plus make 5+ card purchases a month.
* Bank of Queensland WebSavings Account - 2.80%. Available for 4 months on balances up to $5,000,000, then reverting to a rate of 1.20%.
Bankwest kids bonus saver (monthly deposit/No withdrawals) 4.75%