Bankwest have a new savings account giving 10% pa bonus interest for regular savings of between $25 and $250 per month, for kids < 15 y/o! I wish I had kids!
http://www.bankwest.com.au/kids/
GSJ
http://www.bankwest.com.au/kids/
GSJ
Bankwest kids savings account - 10 % pa bonus interest
- Thread starter JIT
- Start date
WOW!!!!!!!!!!!!
three accounts here i come!
thanks GSJ
three accounts here i come!
thanks GSJ
I looked into this for my kids. It seems that you have to set up a kids account for each child then another of this 10% account for each child. So if you had 3 kids that would be 6 accounts. You then can only have the money in the 10% account for 12 months then must transfer it back to the normal kids account. I think there was also a limit as to how much you can have in the 10%. It seemed like alot of hassle to me, maybe the rules have since changed.
I was going to ask, "What is BankWest?" but I found the answer below...
Looks like they are going to be big
http://www.smh.com.au/news/business...1183833637225.html?page=fullpage#contentSwap1
Steve
Looks like they are going to be big
http://www.smh.com.au/news/business...1183833637225.html?page=fullpage#contentSwap1
Steve
We have our cash reserve with Bankwest earning a very noice 6.8% thankyou.
Net bank saver. All on the net. No fees or charges. Paid monthly, calc daily.
On the childs account I have not read the fine print but note that income earnt by children is taxed very very high. I think, from memory after $560 pa income they pay tax at the top rate of 46c in the dollar.
It is to stop rich persons using their kids are tax dodges. Ato site would have the fine print.
Peter
Net bank saver. All on the net. No fees or charges. Paid monthly, calc daily.
On the childs account I have not read the fine print but note that income earnt by children is taxed very very high. I think, from memory after $560 pa income they pay tax at the top rate of 46c in the dollar.
It is to stop rich persons using their kids are tax dodges. Ato site would have the fine print.
Peter
I had a look and to earn the big interest, minimum $25 per month must be deposited each month, but maximum is $250.
I suppose I could transfer $250 per month from my 11 year old's account to this account until it is all over there (he only has around $500 saved so it would not take long, but at least the $500 would be earning 10%) and then do $25 per month.
I agree though that it is a pain to have to open two new accounts.
Wylie
I suppose I could transfer $250 per month from my 11 year old's account to this account until it is all over there (he only has around $500 saved so it would not take long, but at least the $500 would be earning 10%) and then do $25 per month.
I agree though that it is a pain to have to open two new accounts.
Wylie
I looked into this account a few months ago as i was captured by the headline as you have highlighted here - earn up to 10% interest.
But since looking into the tight controls over this account, my opinion is that this is a mickey mouse account aimed at introducing you to the bank to then cross sell other opportunities, not that any bank would do that would they
I guess it is fine for small amounts but i remain unconvinced it is something i would use if i had kids.
I would prefer to let my savings for children build up in an offset account against a mortgage against my home if i wanted the security of cash.
OSS
But since looking into the tight controls over this account, my opinion is that this is a mickey mouse account aimed at introducing you to the bank to then cross sell other opportunities, not that any bank would do that would they
I guess it is fine for small amounts but i remain unconvinced it is something i would use if i had kids.
I would prefer to let my savings for children build up in an offset account against a mortgage against my home if i wanted the security of cash.
OSS
If you are <18 y/o and earn investment income <$1334 pa, I believe no tax is payable on that income.
So, once this Bankwest kids savings account hits about $13340, maybe you could transfer all this money back into your own account, then deposit it back in at $25-$250/mth and continue the process?!
GSJ
Note: Just a thought, seek your own legal/financial/taxation advice!
So, once this Bankwest kids savings account hits about $13340, maybe you could transfer all this money back into your own account, then deposit it back in at $25-$250/mth and continue the process?!
GSJ
Note: Just a thought, seek your own legal/financial/taxation advice!
The maximum opening deposit is $250 and the maximum amount(s) which may be deposited in any calendar month is $250.
This will prevent you from building up a huge balance from this account - total balance at end of year is $3250 plus interest earnt along the way (maximum of less than $200). At the end of the term the funds are transferred back to the childrens savings account to earn minimal interest.
I remain unconvinced this is really worth the trouble.
For the first year not a bad idea but from the second year onwards I would move the funds built up into my offset account against my home mortgage and transfer funds to the offset account.
Whilst you will not see interest added to your offset account which i guess is a psychological need, it may be working just as hard if not harder for you and your kids.
OSS
This will prevent you from building up a huge balance from this account - total balance at end of year is $3250 plus interest earnt along the way (maximum of less than $200). At the end of the term the funds are transferred back to the childrens savings account to earn minimal interest.
I remain unconvinced this is really worth the trouble.
For the first year not a bad idea but from the second year onwards I would move the funds built up into my offset account against my home mortgage and transfer funds to the offset account.
Whilst you will not see interest added to your offset account which i guess is a psychological need, it may be working just as hard if not harder for you and your kids.
OSS
I'm a little confused on this.GSJ said:
Here the ATO says $772 is the threshold, above which the 66% tax rate will apply.
However, here they say $416 but thanks to some $600 low income tax offset it effectively becomes $1,334 (although my calculation would put it slightly lower at $1,325).
And here they say the child doesn't have to lodge a tax return if they earn less than that $1,334.
So while the $772 figure is the one I remember from before, it seems the $1,334 figure also applies. I don't know what the story is with the two different figures then, but both indicate they're current for the 2006-2007 financial year.
GP
Hi GP,
Tax lax confusing? Nah, that can't be right....
Mark
Tax lax confusing? Nah, that can't be right....
Mark
I have set up a Bank West kids saver account and the way they pay interest is not all that good. Again, people are focussing on the 10% rate.
There are a bunch of conditions, which for what I am using it for is OK. You need to deposit between $25-$250 per month to get the bonus rate of 10% and you need to have the Bank West children’s savers account attached as well and you cannot make any withdrawals from the bonus account (so 2 accounts opened).
I have had it for over 12 months now and put in at least $100 p.m and at the end of 12 months, they sweep all the funds in the bonus account (10% account) into the Children’s savers account, which reverts to between 4% to 6% depending on the amount in there.
The problem with the Children’s saver account is that they calculate interest monthly, not daily and they calculate it on the minimum in that account each month, then they pay annually, so there is minimal compounding.
Whilst you can have compounding interest on the bonus account, you can only put a maximum of $3000 in per year, if you pay $250 p.m.
The way I have set it up to maximise, is that I pay $100p.m from myself and I add an extra $150p.m from the Children’s saver account, making the most of compounding as transactions from the attached account do not cancel the bonus interest.
Now that there is about $2500 in between the two accounts, on a spreadsheet my son would be earning more interest with NAB junior saver, currently at 6.6% if you abide by all the conditions to obtain the bonus interest (which we will be) due to being paid interest daily and it being able to be compounded.
The Bank West kids accounts are good when you are just starting out and have minimal savings, then after that the compounding effect is nearly lost by sweeping your money into an account that pays interest annually and is calculated on the minimum amount in your account monthly.
There are a bunch of conditions, which for what I am using it for is OK. You need to deposit between $25-$250 per month to get the bonus rate of 10% and you need to have the Bank West children’s savers account attached as well and you cannot make any withdrawals from the bonus account (so 2 accounts opened).
I have had it for over 12 months now and put in at least $100 p.m and at the end of 12 months, they sweep all the funds in the bonus account (10% account) into the Children’s savers account, which reverts to between 4% to 6% depending on the amount in there.
The problem with the Children’s saver account is that they calculate interest monthly, not daily and they calculate it on the minimum in that account each month, then they pay annually, so there is minimal compounding.
Whilst you can have compounding interest on the bonus account, you can only put a maximum of $3000 in per year, if you pay $250 p.m.
The way I have set it up to maximise, is that I pay $100p.m from myself and I add an extra $150p.m from the Children’s saver account, making the most of compounding as transactions from the attached account do not cancel the bonus interest.
Now that there is about $2500 in between the two accounts, on a spreadsheet my son would be earning more interest with NAB junior saver, currently at 6.6% if you abide by all the conditions to obtain the bonus interest (which we will be) due to being paid interest daily and it being able to be compounded.
The Bank West kids accounts are good when you are just starting out and have minimal savings, then after that the compounding effect is nearly lost by sweeping your money into an account that pays interest annually and is calculated on the minimum amount in your account monthly.
ANZ;s progress saver account may be more flexible if you have less money. not as high interest rate, but its a couple of % higher if you put in minimum of $10 per month and don't withdraw any money. You don't have to have another account of anything like that. I'm also using ING account for savings.
Pen
Pen
What is the ANZ progess saver paying currently
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