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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?
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).
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.
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.
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).