Kids Bank account

I've just became a Grandfather and I would like to start a bank account for my little grandson just a few dollars a week until he is 18. Who's the best bank to open an account?
 
I've just became a Grandfather and I would like to start a bank account for my little grandson just a few dollars a week until he is 18. Who's the best bank to open an account?

Congratulations.

Most of the major banks have very good children's bank accounts with good interest rates and no fees.

Last time I checked BankWest had a really good children's account that had bonus interest for regular deposits and no withdrawals

http://www.bankwest.com.au/personal...vings-accounts-term-deposits/kids-bonus-saver
 
My kids have commonwealth bank accounts with bonus interest for monthly deposits with no withdrawals and no fees. It really motivates them to not take it back out and deposit frequently.
 
Have a look at an investment bond - no tax payable after 10 years. Needs a decent deposit to kick it off but you can add more annually.

Otherwise look at something like school scholarship whereby you contribute monthly and it builds up to pay school or uni fees. (or pulled out at 18 if they don't go to further education).
 
Have a look at an investment bond - no tax payable after 10 years. Needs a decent deposit to kick it off but you can add more annually.

We went down this path with each of our kids as it didn't further complicate our tax returns. Nowdays you don't need to start with a large initial balance (some you can start with $0 if you set up a regular savings plan).
 
We went down this path with each of our kids as it didn't further complicate our tax returns. Nowdays you don't need to start with a large initial balance (some you can start with $0 if you set up a regular savings plan).

I'm confused. So if you open a normal savings account for a baby..by the time the kid is say 15 and it has $20K in it, the kid is paying tax on the interest earnt, plus the $20K is potentially considered as part of the parents financial situation? But you avoid all that by having an investment bond?

How do I learn more about this? I have some little rugrats that I'd like to be doing something useful for beyond buying coin collections each year, and giving the parents money for school/sport/health bills when they need it.
 
I'm confused. So if you open a normal savings account for a baby..by the time the kid is say 15 and it has $20K in it, the kid is paying tax on the interest earnt, plus the $20K is potentially considered as part of the parents financial situation? But you avoid all that by having an investment bond?

How do I learn more about this? I have some little rugrats that I'd like to be doing something useful for beyond buying coin collections each year, and giving the parents money for school/sport/health bills when they need it.

There's product disclosure statements on the AMP and Commbank websites (and there's probably others). I'd rather they explain it than me, just in case I get it wrong (and I'm not a qualified advisor).
 
Tranquilo if I was you, I'd set up a share trading account and purchase an Index Fund ETF (Vanguard Australian Shares one would be good) instead. Instead of putting in money in each week, you can buy a few units a month or whatever and reinvest dividends. Cash accounts for long term investment are rubbish. By the time you factor in tax and inflation, you're going backwards every year.
 
Tranquilo if I was you, I'd set up a share trading account and purchase an Index Fund ETF (Vanguard Australian Shares one would be good) instead. Instead of putting in money in each week, you can buy a few units a month or whatever and reinvest dividends. Cash accounts for long term investment are rubbish. By the time you factor in tax and inflation, you're going backwards every year.

That does look good. Can I start that in the child's name?

Thanks Mr. Fab
 
I am a recent uncle x3 (with more to come). I too looked into this.

We decided on the bank west account as it was the best of a bad bunch. At the end of each year, you draw the balance out to a high interest savings account - thereby receiving a reasonable interest rate.

Otherwise look at something like school scholarship whereby you contribute monthly and it builds up to pay school or uni fees. (or pulled out at 18 if they don't go to further education).

From what I looked into these things are a farce. Basically they are a savings account paying very minimal interest. At the end of 18years your balance is barely above the cash you put in. And if you withdraw it for anything other than schooling, you lose all benefit.

Another good option is the ETF. I haven't looked into the best method of purchasing in a childs name though. If you find out more I would be interested in transferring the current cash into one of these.

Cheers
Blacky
 
We bought a cheapo double block in 2 titles when my daughter was 7 and one of those is hers but we only pay a single block rates. Were doing something with the other one . She can have it at 21 and hopefully the areas boomed and it's worth some good money.
If not maybe she wants to get creative and turn it into something worth some good money .
 
As an alternative, what about buying units in an index fund? Far better return, and upon reaching the prescribed age the recipient could redirect dividends to themself as an income stream without eroding the underlying asset (which would still grow over time).
 
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