Online Savings Vs Term Deposits

[WASP]

Online Savings or Term Deposits, whats the best for Children's saving accounts?

The kids currently have Term Deposits and looking at the no fee on-line interest savings accounts, the rate is higher but it appears you also have to have another linked account

Savings are usually deposited weekly or fortnightly with the current term deposits

 

[BMW]

we have our kids money in a savings account recieveng a grand 3.x%. Thinking about putting the money into index funds and keep adding to it every few months. Hopefully in 15-20 years there should be a reasonable amount for a start in the real world. Just not sure on how to set this up yet..

 

[lizzie]

I have juniors money in a high interest acc with Newcastle Permanent ... as long as there is one deposit and no withdrawls in a monthly period, you get something like 4.65% ... no statements, but I'm cool with that. I just have a direct transfer of $20 go in each month ($5/wk on top of the $5/wk cash pocket money)

http://www.newcastlepermanent.com.au/tabid/Personal/Savings/RapidSaver/tabid/76/Default.aspx

 

[BayView]

We've had an ING online account since about 2000.

never had a prob, and the rates are as good or better than TD's and the money is available with 24 hours.

No doubt there are others as good or better.

 

[redwing]

We've had an ING online account since about 2000.

never had a prob, and the rates are as good or better than TD's and the money is available with 24 hours.

No doubt there are others as good or better.

Hi Bayview

Do you have to have a linked normal account?

On another note, I saw in the paper last month an advertisement saying Westpac would give you $50.00 for starting a new account (expired now).

 

[redwing]

we have our kids money in a savings account recieveng a grand 3.x%. Thinking about putting the money into index funds and keep adding to it every few months. Hopefully in 15-20 years there should be a reasonable amount for a start in the real world. Just not sure on how to set this up yet..

Let us know how you go?

 

[intrigued]

This may help
http://www.canstar.com.au/kids-bank-accounts/
http://www.canstar.com.au/deposits/compare/junior-saver/

 

[BayView]

Hi Bayview

Do you have to have a linked normal account?

Yep. It has to be linked to a normal Bank account.

We have a few different accounts with ING for various purposes which all have automatic direct debits set up to pay money into them each week.

It's quite easy to set up.

 

[KCprop]

Would kids be taxed highly for interest in those accounts?

 

[Indifference]

Neither.... junior's savings are in "money" not "currency"..... Why?

Because over an extended period of time, "money" maintains its purchasing power, whereas "currency" requires very careful management to keep abreast of inflation.... and I mean headline inflation, not that fanciful core inflation figure that the government uses to mask what is really going on...

At 3.XX% your purchasing power will erode unless it is tax-free growth. Even then, you may still fall short. Cash in a high yielding account should be able to keep abreast of inflation however since in the later years of saving the nest egg would be considerable, you may breach tax-free thresholds depending on how the account is set up and individual circumstances. This will detract from the goal of maintaining purchasing power over the long term. Real "money" does not care about such issues....

 

[BMW]

Let us know how you go?

in 15-20 years?

just need to talk to the family accountant over chrissie. I think we need to set them up with TFN otherwise the dividends get taxed at 49%

 

[redwing]

in 15-20 years?

just need to talk to the family accountant over chrissie. I think we need to set them up with TFN otherwise the dividends get taxed at 49%

No....with the set up

 

[HandyAndy888]

I have 1.3 words for you: UBank

 

[Crabnet]

I have 1.3 words for you: UBank

uBank only accept applicants aged 18 years old or over.

 

[HandyAndy888]

uBank only accept applicants aged 18 years old or over.

Yeah, but really, in a term deposit or a saver, they won't be touching their money anyway, mommy and daddy won't let them miss out on those extra bonuses the others offer, while UBank have it as standard. Crap service, but awesome products.

 

[redwing]

I have 1.3 words for you: UBank

Looks like you have to deposit $200 per month to get the bonus interest?

I saw this from ME Bank

 

[westminster]

Last time I checked Wankbest had an awesome deal but there was maximum limits

http://www.bankwest.com.au/personal...vings-accounts-term-deposits/kids-bonus-saver

 

[Crabnet]

Looks like you have to deposit $200 per month to get the bonus interest?

Strictly speaking you have to set up an ASP(automatic savings plan) of at least $200 a month to qualify for the bonus interest.
However if you also withdraw money in that month you still qualify for the bonus interest. Other banks have a condition that to get the bonus interest your can't make withdrawals in the month.
As an aside it looks like the days are numbered for these online savings accounts that offer high interest to attract the hot money. Some term deposits are offering higher rates than the online at-call accounts. Hasn't been like that for a while.