What's the best account to open.....

iVillage Member
Registered: 06-11-2004
What's the best account to open.....
6
Thu, 04-13-2006 - 11:49am

to save some money for the baby for when he gets older. Since I should be getting my state tax refund any day now I want to take advantage of some of the money and open up an account for the baby that will gain interest and by the time he's 18 or 21 he'll have a little nest egg so to speak lol. Something my mom wasnt able to do for us.

I mean its not a whopping amount as the federal refund is always bigger but that went to back bills and such, I gotta start somewhere. What type of accounts do you guys have for your kids?

iVillage Member
Registered: 03-19-2003
Thu, 04-13-2006 - 12:54pm

My kids each have a $50 savings bond that their great-great grandmother gave to them on their 1st birthdays.


Karen ~ wildlucky4me ~

iVillage Member
Registered: 06-11-2004
Thu, 04-13-2006 - 1:13pm
Taking him when he's older will be cool. I just want to be able for him to have every opportunity available to him. My mom did great considering she was a single mom with three girls. She gave what she could, when she could. It's great though when you get older and see how your parents were planning for your future when you were younger. I was checking out savings bonds, cds, and money market stuff. I will go in the bank and sit down with one of those "investment people" and see what they are offering.
Avatar for mom2maggie
iVillage Member
Registered: 05-29-2003
Thu, 04-13-2006 - 1:37pm
At the risk of stating the obvious, another thing to keep in mind is that it's usually not wise to invest much in investments for your children until after you've taken full advantage of any employer match and/or tax deferred retirement opportunities for yourself. You can always borrow from your retirement later if you want to help your children with college, etc. However, you can't take out a loan to pay your rent when you're 85.
iVillage Member
Registered: 03-05-2006
Thu, 04-13-2006 - 1:43pm

Mom2Maggie is absolutely correct about saving for your own future first. You can start a ROTH IRA with very little money. It is considered retirement savings, BUT you can borrow from it for the purposes of paying tuition for yourself or your children with no penalty.

However, I also agree that it sends a message to your child to save in their name for their future. You need to Google your state 529 plan (for me it would be "NY State 529")to learn about your states college saving plan. It is the BEST way to go. Each state has one. Do not waste your time on savings bonds or accounts at the local bank. You will not accrue any interest to speak of so they are about as useful as a shoebox under the bed.

Susie

iVillage Member
Registered: 06-11-2004
Thu, 04-13-2006 - 2:01pm
I have a 401K plan through my job for my retirement already. I also while I have the bit of extra money from the refund want to do something useful with it and put away some money for the baby instead of just blowing it. Thanks for the advice.
Avatar for mom2maggie
iVillage Member
Registered: 05-29-2003
Thu, 04-13-2006 - 2:58pm
I agree that savings accounts at a bank are not useful if your goal is for it to grow as an investment. However, I think they are very valuable as Karen described for teaching your children.