Where to put the Grade school kids money

[gavinsiu]

So over the years, some of the relatives have given kids money, so now they have probably accumulated a few hundred. They haven't spent it, so the question is what to do with it.

1. Start an account with the local bank - this was the option I took when I was a kid. However, I have notice that many young people these days don't even use a local bank and choose to go with something like an internet bank. In addition, investment options are limited.

2. Start an account with a brokerage like Fidelity - teach them how to login and invest. They are in grade school, so I probably need to teach them about how money works, too.

[DoubleComma]

Basic savings account with a local credit union. It will be all they need till they can make their own choices regarding their banking relationship.

Online banks are great, but it’s still pretty hard to deposit cash. Most kids end up with cash.

[Minty]

Fidelity has a youth account with a nice little bonus, but the owner has to be 13-17.

[markjk]

Another option is the greenlight card.
https://greenlight.com

[eric321]

Chase first has a good checking account option for those 6+. Use for small dollars and the ability for the kid to spend themselves.

Small amounts of cash on hand in a real wallet is good to have them order, collect change and learn how to buy stuff, particularly for shy kids.

529 is a good option to a larger amount. Gift is to the parent who outs it in their 529 account to the kid

I bonds - great. Last year, more challenging value proposition this year. Other treasury direct options available as well, and no age restriction for an account.

[riverant]

So over the years, some of the relatives have given kids money, so now they have probably accumulated a few hundred. They haven't spent it, so the question is what to do with it.

1. Start an account with the local bank - this was the option I took when I was a kid. However, I have notice that many young people these days don't even use a local bank and choose to go with something like an internet bank. In addition, investment options are limited.

2. Start an account with a brokerage like Fidelity - teach them how to login and invest. They are in grade school, so I probably need to teach them about how money works, too.

Faced the same question a few months ago. They’re little, so don’t need to spend that kind of money. We opened up UTMA accounts at fidelity and invested in total market. I’ll top up any losses plus normal interest on the off chance it loses money when they’re older and want to withdraw. I didn’t see the value in a local checking account.

[KlangFool]

OP,

Invest in your taxable account. When they are old enough and work in the summer, move to their Roth IRA. Or, when they started working, move to their tax advantaged accounts.

KlangFool

[JPH]

They should be encouraged to wisely spend some of it. Young kids need to learn the value money for the joy and good that it can bring and not see it as just something to be hoarded.

[VoiceOfReason]

OP,

Invest in your taxable account. When they are old enough and work in the summer, move to their Roth IRA. Or, when they started working, move to their tax advantaged accounts.

KlangFool

This is all good.

I opened taxable accounts in my name but will hold their $$. My plan is to just invest, never sell. When they are mid 20’s I want to gift the stock directly to their taxable account or to a rIRA.

If I gift to a kids taxable account while directly transferring stocks over do they get the stepped up cost basis as of date they receive it and I would owe no taxes?

[oldfatguy]

Please don't put your kids' money in an account in your own name. Use a UTMA account, even if it is only a few hundred dollars. Too many potential pitfalls, otherwise, and is at best "gray area" ethical and legal.

[KlangFool]

OP,

Invest in your taxable account. When they are old enough and work in the summer, move to their Roth IRA. Or, when they started working, move to their tax advantaged accounts.

KlangFool

This is all good.

I opened taxable accounts in my name but will hold their $$. My plan is to just invest, never sell. When they are mid 20’s I want to gift the stock directly to their taxable account or to a rIRA.

If I gift to a kids taxable account while directly transferring stocks over do they get the stepped up cost basis as of date they receive it and I would owe no taxes?

VoiceOfReason,

1) I do not buy stock. I invested their money into the Vanguard Life Strategy Growth Fund.

"When they are mid 20’s "

2) My kids started working while in high school.

"If I gift to a kids taxable account while directly transferring stocks over do they get the stepped up cost basis as of date they receive it and I would owe no taxes?"

3) The amount of taxes that I paid for this is too small for me to worry about.

4) My kids graduated college with 20K to 30K of their own savings/investment. It was saved and invested over 20+ years.

KlangFool

[KlangFool]

Please don't put your kids' money in an account in your own name. Use a UTMA account, even if it is only a few hundred dollars. Too many potential pitfalls, otherwise, and is at best "gray area" ethical and legal.

oldfatguy,

I disagreed. There are too many pitfalls with UTMA.

KlangFool

[onourway]

We have UTMA accounts for longer term savings.

For petty cash, I have long maintained a digital account for them as a line item for each kid in my budgeting app (YNAB). I act as the bank and take their cash (which is convenient, because it saves me from having to go to the ATM) and most of their spending is digital through my credit cards anyhow.

Our oldest kids now have cellular Apple watches rather than a phone, and those have Apple Pay Cash accounts which makes sending them money as easy as sending a text message. They can spend that money how they see fit - most stores and even vending machines now accept wireless payments so they always have some cash available to spend without having to carry physical cash.

[Beachey]

I set up DCU savings accounts for both of my children where they are making 6% up to $1000. Once the accounts hit $1000, I buy I-bonds with the interest. Not sure I will continue with I-bonds if the interest rate goes close to zero. This money was in UTMA accounts in my local credit union but the money was accruing zero interest.

At one point, I had their money as a separate bucket in my Ally Savings account but in that case, I am paying tax on that interest (not that it was a significant amount of money)

[dcraider]

I have a fifth grader. I use a layered approach.

1. A bank savings account just to keep $100-120 in for her spending money from allowances. No fees. It comes with a debit card in her name and I can use it on her and my apple watches so she can pay electronically for things when she doesn't have the card (which is 99% of the time). Kids/teens like to pay this way and so do I now. She doesn't have a phone and won't for a while but she does have a connected watch.

2. Over the $100-120, I put overages in Ally Savings Account paying 3.40% for the next couple hundred she earns.

3. I opened a Vanguard EFT and put $1000 she earned there. I'll continue to invest in EFT's there for her for long term savings.

[Glockenspiel]

They should be encouraged to wisely spend some of it. Young kids need to learn the value money for the joy and good that it can bring and not see it as just something to be hoarded.

I agree with this. My 7-year old son never wants to buy anything of his own, even though he really wants certain Pokemon cards and toys. He doesn't want to "waste" it, but it will bring him joy, so I want him to spend it, as he now has over $1,000 of his own, through gifts over the years.

[gavinsiu]

oldfatguy,

I disagreed. There are too many pitfalls with UTMA.

KlangFool

What's the pitfall with UTMA?

[gavinsiu]

I like to thank everyone for their suggestions. I recently borrow a DK book from the library to teach kids about money and will skim through it to see if I it can be used. They already have a 529, but that's managed by me.

I thought about signing them up for Fidelity Youth, too but someone mentioned that they are too young. Only one of them have a cell phone.

I guess my goal would be to deposit the cash somewhere and then teach them about the concept of money. I just want them to be aware that money is finite resource that one typically work hard to acquire and then manage. What I hope is that they can eventually make decisions on like either buying some stuff short term vs saving for a bigger item. I would have like to have had this knowledge when I was younger.

[KlangFool]

oldfatguy,

I disagreed. There are too many pitfalls with UTMA.

KlangFool

What's the pitfall with UTMA?

What if they are not capable of handling the money and spend it all?

KlangFool

[anon_investor]

oldfatguy,

I disagreed. There are too many pitfalls with UTMA.

KlangFool

What's the pitfall with UTMA?

What if they are not capable of handling the money and spend it all?

KlangFool

Don't overfund?

[KlangFool]

oldfatguy,

I disagreed. There are too many pitfalls with UTMA.

KlangFool

What's the pitfall with UTMA?

What if they are not capable of handling the money and spend it all?

KlangFool

Don't overfund?

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

[Jags4186]

I have an 18 month old. He’s probably gotten around $500-$600 in gifts from family. I have just put the money in his 529. I expect to continue doing this until he is interested in money and then we can start a piggy bank and then eventually a kids savings account.

[Leesbro63]

I established an account with the Bank of Dad when my kids were little. Kept a spreadsheet of their hypothetical account and paid them interest as appropriate. Much easier than opening "real" accounts etc for that small amount of money. And once they had accumulated "real money" as young teens, we opened a real joint bank account and I put their accumulated amount into that. We kept those accounts open, even though they are around age 30. For convenience. So I can easily click money into their accounts, mainly for gifts for them and the grandkids. And occasionally to zap money out of one of their accounts for stuff that I'll pay for that they are to reimburse me for. Kept it simple when they were little; keeping it simple now that they are adults.

[JimmyD]

We have an 8 year old and are taking the following approach:

1) We recently got him a wallet and taught him what it's for, why it's important, and how to manage it. He keeps $20 or $30 in it, in addition to some gift cards, and brings it with him from time to time when we have to run errands at places like Target. He almost never spends any of it.

2) For his cash beyond that, we keep it in an envelope with his name on it in our home safe. There's no set purpose for it at this point. We just put it there to keep it safe. Every few months he wants to take it out, count it and look at it, but it's pretty much just forgotten about. I believe there's a few hundred there.

3) I talk to him about banks, investments, and more sophisticated finance at a very high level, but really only when he brings it up. It's cool to see him become interested in it and how he can potentially grow his money if he's diligent.

4) In a few years, we'll probably do something like the Greenlight card so he can become familiar with basic banking. As he becomes more interested in finance, I'll gladly introduce him to the concept of investing, compound interest, the Bogleheads wiki, etc. I know that if I had been introduced to Bogleheads at an earlier age, I'd be sitting awfully pretty right now.

5) We'll probably mostly pay for his first vehicle when the time comes, but I'm kicking around the idea of getting him to take out a very small loan, in his name, in order to start building credit. I'm not sure if this is even feasible, but I have plenty of time to figure it out.

[Robdac]

I established an account with the Bank of Dad when my kids were little. Kept a spreadsheet of their hypothetical account and paid them interest as appropriate. Much easier than opening "real" accounts etc for that small amount of money. And once they had accumulated "real money" as young teens, we opened a real joint bank account and I put their accumulated amount into that.

We did the exact same thing.

Bank of Mom and Dad until they were 13. Paid them 10% interest and had them manage the google spreadsheet with a little help at first. They learned a lot.

At 13 we transferred it to a Fidelity Youth account.

[SagaciousTraveler]

We have UTMAs at Fidelity.

Currently the money in the SPAXX (money market) earning just under 4%.

Before money markets started paying anything we would take advantage of Navy Federal Credit Unions 3% CD.

When the kids start working, we will open up a Roth for each and encourage an amount to be contributed with a match from us. (not going over the earned amount).

[oldfatguy]

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

UTMA doesn't give you the choice when they reach the legal age, because it is their money.

[Leesbro63]

I established an account with the Bank of Dad when my kids were little. Kept a spreadsheet of their hypothetical account and paid them interest as appropriate. Much easier than opening "real" accounts etc for that small amount of money. And once they had accumulated "real money" as young teens, we opened a real joint bank account and I put their accumulated amount into that.

We did the exact same thing.

Bank of Mom and Dad until they were 13. Paid them 10% interest and had them manage the google spreadsheet with a little help at first. They learned a lot.

At 13 we transferred it to a Fidelity Youth account.

I actually also did Brokerage of Dad hypothetical stock accounts too. They learned from that as well.

[KlangFool]

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

UTMA doesn't give you the choice when they reach the legal age, because it is their money.

Bingo! And, that is the problem.

In my context, we were talking about 10K to 20K for each kid.

KlangFool

[oldfatguy]

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

UTMA doesn't give you the choice when they reach the legal age, because it is their money.

Bingo! And, that is the problem.

In my context, we were talking about 10K to 20K for each kid.

KlangFool

If you think that letting people control their own money is a problem, I don't even know what to say to that. It's certainly one opinion.

[SagaciousTraveler]

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

UTMA doesn't give you the choice when they reach the legal age, because it is their money.

Bingo! And, that is the problem.

In my context, we were talking about 10K to 20K for each kid.

KlangFool

I understand your reasoning however for us, its their money and they can either deploy our teachings on savings/spending or learn a valuable lesson.

Also, five years ago our state (Ohio) raised the age to 25 for transfer of ownership. Outside of drastic and dire situations, for some families it at least can assist in combating any maturity issues at 18 or 21.

[fire_2030]

A mix of bank of dad and chase first banking. The latter for the debit card capability and ease of dad to kid account transferring (supporting app when they get older). The former to spreadsheet their daily accrued interest at a more favorable compounded rate. Roughly once a month we review the spreadsheet and I ask them two questions, how much money in total have you earned doing absolutely nothing and how much a day are you earning doing absolutely nothing. At their current account level of a 100-200 dollars they are only earning 5-10cents a day but they seem to love it. They love putting in hypotheticals of what would happen to daily interest if they deposited another 20 or 100 ect. As with most things, the 11 and 7 year old seem to want to compete as they are always asking to switch tabs to check out the others performance (trying to temper that behavior across the board). This account is used as a mix of spending and savings to try and teach that it's ok to spend but it has effect on savings and forward projections. 529s are being funded but they don't know and don't need to know that at this age.

[KlangFool]

I understand your reasoning however for us, its their money and they can either deploy our teachings on savings/spending or learn a valuable lesson.

SagaciousTraveler,

In my culture, the kids are given money each year since they were born until they are married. Technically, a person is not an adult until they are married.

Would you give a few thousands to a teenager without teaching them how to manage it?

My kid had checking and saving account of about a few hundred to a thousand. I am managing the amount of money beyond that. They were free to spend it but they need to tell us what is it for.

KlangFool

[KlangFool]

If the kids can manage the money, you want them to manage it. If they can't, you want to maintain control until they can. UTMA don't give you the choice.

KlangFool

UTMA doesn't give you the choice when they reach the legal age, because it is their money.

Bingo! And, that is the problem.

In my context, we were talking about 10K to 20K for each kid.

KlangFool

If you think that letting people control their own money is a problem, I don't even know what to say to that. It's certainly one opinion.

oldfatguy,

To each its own.

My kids graduated college with 20K to 30K of their own savings/investment. A fair amount of the money is in their Roth IRAs. I am satisfied with the result. They learnt how to manage their money step by step.

KlangFool

[Volando]

We went through this exercise recently. Our kids are little so we're teaching them how to handle cash by keeping give, spend, and save jars for their allowance. I thought about bank accounts but it's so theoretical for little kids that we thought it best to let them handle cash and learn how to use it while they're little and watch it grow in their jars. It may be different if your kids are further along/older than ours.

Besides the jars, we also opened up a UTMA account for them, where I match their allowance (which isn't a lot at this point). When they're older and can understand the concepts better, I'll open it up to them so they can learn from that as well and see how their investments have grown alongside the allowance they've received. At that point we may open up bank accounts to hold the cash for them but we'll get there when we get there. As they get older we'll help them learn how to manage these things.

I understood the downsides to UTMA, such as having them receive large amounts of money when they're older and being unable to handle it. At least for us, the money we're talking about is not enormous so they won't have a ton to waste on whatever. If all goes as planned they may have a few grand by the time they graduate high school. We're also going to be teaching them along the way so hopefully that will help mitigate the downsides. Even it doesn't mitigate the downside, it's their money and they have to learn how to use it one way or another.

Your local library probably has some good books on the topic. A straightforward one that I read recently is "Beyond Piggy Banks and Lemonade Stands". Fairly simple book but good to get started on thinking through this.

[NotWhoYouThink]

It turns out that a lot of what we do as parents doesn't matter much. Some of it does, but we almost never know at the time which things will matter. Kids have turned out fine when their parents paid for everything, and other kids have turned out fine when they never got anything they didn't earn the money for. So whatever you do will probably work out fine for most types of kids, and will probably not prevent disaster if your kids lack innate discipline. Best you can do is to set some rules you can logically defend, and stick to them so the kids know they can't whine their way to taking over.

No one in our family gives our kids or any kids significant amounts of money. It isn't our culture or practice. If it is yours, you may want to set things up differently. But we made sure every $ given to our kids went directly to them for their spending or saving. Also, we had 2 college-educated high wage earning adults in the house, and have been financially secure for decades, so never needed income from the kids to support the family needs.

We decided to give our kids experience spending money early, so that they could watch their savings grow, or watch their piles of stuff grow, but not both. We opened accounts in their name, linked to our accounts, at the local banks. That's where gift money went, or if it was cash they kept some of it for spending. When they were young and wanted toys they were allowed to spend their money on stuff we thought was junk.

When they got to high school we started paying them enough allowance that they could pay for their own clothes and entertainment. (Because of their academic and athletic commitments, we did not insist on them working at paying job. Other families made different choices which worked for them.)
We had one kid who early on decided to live in rags and walk/bike most places while savings grew, and one who spent almost every dollar as soon as it was available on clothes and entertainment. Both are now responsible, financially independent adults.

Do what you can defend to yourself, your spouse, and your kids. I probably won't like some of your choices, which is my problem and not yours. The only specific advice I have is to let them know the rules so they don't have to guess, and to stick to your rules and make sure they know there is no use in trying to nag you for money.

ETA: One more thing. Teaching kids to give is all well and good, but I get pretty feisty about parents being overly generous with their kids' money. If you tithe and insist your kids to the same, fine. I've heard a lot of "save a third, spend a third, give a third" nonsense on this board and other places. If you aren't giving a third or a quarter or a tenth, don't force your kids to.

[DarthSage]

We just did savings accounts, with Grandma providing UTMAs for larger gifts. Grandma would give large cash gifts for holidays--we'd stick them into savings, then take out some later in the year, for vacation souvenirs.

When my kids got their first "real" jobs, they got a checking/debit account. Mine had W-2 type jobs, but I would consider this for a kid who was earning regularly in any capacity--mowing lawns, shoveling snow, babysitting, etc.

When heading off to college, they actually got 2 credit cards--one as an authorized used on mine, the other of their very own. The first card was for things I approved of--plane tickets home, for example. The second was for them to manage themselves (and had a much lower limit).

They have/had UTMAs--we would show them quarterly statements, so they could see how much they earned, while sitting on their butts. The "set it and forget it" strategy is important.

The overall goal is to help them learn to use money as a tool.

True story: we took our kids to Disney World, giving each $100 in spending money (courtesy of Grandma), and designating $25 per park, with the balance rolled over. Our older son wanted Pokemon cards from the store in Japan. He wanted to spend all his money on them. We pointed out that it was Day 3 of the trip, if he spent his money today, that was it. He insisted. There was no changing his mind. We let him buy them...and suffered through his pain when he had no money left for Star Wars or Pirates of the Caribbean merchandise. That particular child only learns lessons if they're painful. But, better to learn this when he's 8, than to have him plow through thousands of dollars at age 20.

[gavinsiu]

I called Fidelity today and they confirm that I cannot sign the kids up for the Kids account because they are too young. However, I could sign up a custodial account, which appears to be a joint account where the account would be under my name but the kids would have access witht he taxes also being to me.

I asked about the IRA in the event they decided to do a summer job (as I did at the oldest's age), but the Fidelity rep said they can't sign them up unless thay are 21 and working. This does not sound right to me. I checked and there appears to be no age limit to ira, but it might be a challenge to create an IRA for a grade schooler.

May be I will make some more calls and report back.

[Grt2bOutdoors]

I called Fidelity today and they confirm that I cannot sign the kids up for the Kids account because they are too young. However, I could sign up a custodial account, which appears to be a joint account where the account would be under my name but the kids would have access witht he taxes also being to me.

I asked about the IRA in the event they decided to do a summer job (as I did at the oldest's age), but the Fidelity rep said they can't sign them up unless thay are 21 and working. This does not sound right to me. I checked and there appears to be no age limit to ira, but it might be a challenge to create an IRA for a grade schooler.

May be I will make some more calls and report back.

If the kid is issued a W-2, what is the issue with opening the IRA? There is no age limit for an IRA, but there could be an age limit for opening a brokerage account at Fidelity. You might have to open it under a custodial agreement since the kid isn't young enough to legally execute an account opening form. Call Fidelity Retirement Services and ask them about that.

The custodial account - the taxes should be assigned to the kids social security number, not yours. You would be the custodian but the money belongs to the kids.

[LoveAllDogs]

We put money give to our daughter into an UTMA account. Then we buy index funds with it. She had QQQ, but recently switched to SPY.

[DarthSage]

We're setting up a Roth for DS16 in the next month or so. He actually requested one, now that he's working! Meanwhile, DD19 has a Roth 401k through her job at Starbucks. She puts in 10% of her earnings, Starbucks matches 5% that goes into a regular 401k. So, even part-time jobs can sometimes have retirement savings benefits. Good thing for DD19--she earned over $15k last year, and will be thanking herself in 50 years or so, with all that compounding.

[KlangFool]

We're setting up a Roth for DS16 in the next month or so. He actually requested one, now that he's working! Meanwhile, DD19 has a Roth 401k through her job at Starbucks. She puts in 10% of her earnings, Starbucks matches 5% that goes into a regular 401k. So, even part-time jobs can sometimes have retirement savings benefits. Good thing for DD19--she earned over $15k last year, and will be thanking herself in 50 years or so, with all that compounding.

Is she contributing to Roth IRA too?

KlangFool

[gavinsiu]

If the kid is issued a W-2, what is the issue with opening the IRA? There is no age limit for an IRA, but there could be an age limit for opening a brokerage account at Fidelity. You might have to open it under a custodial agreement since the kid isn't young enough to legally execute an account opening form. Call Fidelity Retirement Services and ask them about that.

The custodial account - the taxes should be assigned to the kids social security number, not yours. You would be the custodian but the money belongs to the kids.

Yes, I think the Fidelity Rep may be thinking of a joint account.

[gavinsiu]

OK,

a bit more details.the accounts I have notice are:

1. Child Checking Accounts - In the US, the minimal age to open one appears to be 13 and has to be a joint account. Typically to open one would be to have the parents and the child's ID. In the child's case, it's typically a birth certificate. Some banks may require that the parents have an account there, too.

The minimal balance and interest earn vary from bank to bank, but typically it is low and there is generally no interest. Usually the bank provide some sort of parental control until they are 18. At 18, the account may revert to the child. I haven't figure out if there is a way to prevent this transition should the chid turn out to be bad with money.

Taxation is treated like a joint account.

2. Child Savings Account - The minimal age vary from bank to bank. Unlike checking account, it can be lower than 13. Some banks even offer them to infants.

3. Custodial acount - these are often call UTMA or UGMA. These are essentially brokerage account that you setup in the child's name for the child. The account is in the child's name but is controllled by the parent until the account holder reaches 18th and gain control of the account. Tax-wise it's taxed under the child.

4. ESA - typically educiation IRA which include plans like 529.

5. Trust funds - typically thought of as a rich person's instrument. Trust funds are often trust setup for a specific purpose like care of a disable child. I am going to skip over this since a trust is a bit too complicated for most.

6. Debit cards - These are loadable debit card which allow you to load money into a card for the child to use. Some of teh companies seemed to have weird names like GoHenry or Greenlight. Many will charge a monthy fee like $5. Some vendors don't even have a minimal age.

As another poster pointed out, most kids will get cash and we probably need to setup a physical bank. The other alternative is to just have the parents deposit money into the bank and then added it to a debit cards. For really young your option may be a joint savings account or debit card.

When the kids start making money such as dog walking or baby sitting, a custodial Roth acocunt can be setup. Some on this thread have indicated a possible issue where the kids might not be good with money. My thought was that it probalby won't be that much money. If they mismanaged it, you will know to adjust your estate plan.

[DarthSage]

We're setting up a Roth for DS16 in the next month or so. He actually requested one, now that he's working! Meanwhile, DD19 has a Roth 401k through her job at Starbucks. She puts in 10% of her earnings, Starbucks matches 5% that goes into a regular 401k. So, even part-time jobs can sometimes have retirement savings benefits. Good thing for DD19--she earned over $15k last year, and will be thanking herself in 50 years or so, with all that compounding.

Is she contributing to Roth IRA too?

KlangFool

We'll either contribute to a Roth IRA for her, or move some of her UTMA funds into a Roth--we haven't done our 2023 calculations yet, so I don't know how much "spare" we'll have. DH makes a decent amount and we're in the 2-comma club, but we also have 3 in college and retirement is looming. But the short answer is, yes, she'll have a Roth IRA. I can't resist a bargain, whether it's a sale on meat or tax-free growth!

[Weathering]

I set up DCU savings accounts for both of my children where they are making 6% up to $1000. Once the accounts hit $1000, I buy I-bonds with the interest. Not sure I will continue with I-bonds if the interest rate goes close to zero. This money was in UTMA accounts in my local credit union but the money was accruing zero interest.

At one point, I had their money as a separate bucket in my Ally Savings account but in that case, I am paying tax on that interest (not that it was a significant amount of money)

What is a DCU savings account and can anyone get that 6% up to $1000?

[Beachey]

I set up DCU savings accounts for both of my children where they are making 6% up to $1000. Once the accounts hit $1000, I buy I-bonds with the interest. Not sure I will continue with I-bonds if the interest rate goes close to zero. This money was in UTMA accounts in my local credit union but the money was accruing zero interest.

At one point, I had their money as a separate bucket in my Ally Savings account but in that case, I am paying tax on that interest (not that it was a significant amount of money)

What is a DCU savings account and can anyone get that 6% up to $1000?

https://www.dcu.org/bank/savings/primary-savings.html

I believe you don't otherwise qualify you can join an organization that qualifies you for as little as $10.

https://www.dcu.org/membership/member-eligibility.html

[Tyrael314]

We have a 2 year old.

529 set up through Fidelity has a “gifting” option that we sent links for to appropriate family members and that we contribute to regularly. We have thought about a brokerage account (UTMA) but after having gone through paying off my wife’s student loans we have no interest in our son experiencing that debacle. Maybe if we get to a point where we feel college is covered that would be our next step.

Any gifts etc. get split up and about 80% go into the 529. The rest goes into a basic savings account at a local bank. Eventually when they are working or earning money they can utilize the savings account and will have money for a car or whatever other expenses may come up.