Savings Account for my kids

[Robbiep]

Hi guys,

I would like to start a little savings account for my kids (2.5 years and 3 months old).

Ideally, the account should have minimal fees.

There should also be some difficulty in terms of getting the funds out the account.

I only plan to put about $10 per week into each account.

Do you guys have any recommendations?

Regards,
Robbie

 

[Tano]

Bankwest Kids Bonus Saver
8.00%p.a.
bonus interest (variable)
8.00% p.a. variable bonus interest rate with no account fees
bonus interest paid each month when $25-$250 is deposited and no withdrawals are made
link to a Bankwest Children’s Savings Account

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

 

[Terry_w]

Watch out if your kids earn more than $416 pa from unearned income.

 

[AXXO]

I would also say that if the parent provided the money, is signatory and controls the account then the parent is the one who declares the interest for tax purposes.

Moneybuddy is a good website for comparing financial products which I use for checking financial stuff myself.

They have a bit about the best kid's bank accounts here:
http://www.moneybuddy.com.au/bank-accounts/kids-savings-bank-accounts-for-kids

 

[Kinnon Bell]

On some accounts there can be debit restrictions placed so funds can be deposited but not withdrawn.

 

[Peter_Tersteeg]

What sort of timeframe to access it are you thinking about.

Anything with a 10 year plus timeframe and insurance bond or educational bond is probably going to be way better than what you're likely to get in a bank account. Over that timeframe it's also tax free.

 

[Ausprop]

perhaps look to a mutual so you get a bonanza when they sell out??

 

[1911naomi]

Anz progress saver 4.65%. No monthly fee Minimum deposit of $10 per month . 8% sounds too good to be true

 

[alexlee]

8% sounds too good to be true

It's a 12 month introductory rate, after which the balance is swept to an account with much lower interest.

Considering the tax rate for minors on unearned income, it's not like parents can use it as a high interest account (anything more than $5,000 average balance will earn more than $416 after which the marginal rate is higher than an adult's).

So there are catches, but considering BankWest is owned by Commonwealth Bank it's not like a fund lending to property developers or something.

 

[redwing]

It's a 12 month introductory rate, after which the balance is swept to an account with much lower interest.

Considering the tax rate for minors on unearned income, it's not like parents can use it as a high interest account (anything more than $5,000 average balance will earn more than $416 after which the marginal rate is higher than an adult's).

So there are catches, but considering BankWest is owned by Commonwealth Bank it's not like a fund lending to property developers or something.

cancel after 12 months?

 

[Comet]

Thanks for all the info here, I am looking at filling in one of the bankwest application forms for the bonus saver children accounts. One of the questions is provide child's tax file number, do children already have this or do I need to apply for it?

 

[alexlee]

One of the questions is provide child's tax file number, do children already have this or do I need to apply for it?

Children aren't born with a tax file number, if that's what you mean. You have to apply for it.

 

[Comet]

Children aren't born with a tax file number, if that's what you mean. You have to apply for it.

I didnt think they were born with it

When I have registered them with centrelink for Ccb wasn't sure if that crossed paths with tax office or appropriate office, but I will apply for one, to be able to open them bank accounts.

 

[CHAOS]

Watch out if your kids earn more than $416 pa from unearned income.

My father has set up a trust fund bank account for my son. The bank is withholding 46.5% of the interest each month. He is earning $20 a month (before tax withheld) in interest so a long way off the $416 pa at this stage.

Do I need to organize a TFN for my son and have my dad give it to the bank?
How do I get back the last 2 years interest that they have withheld?

 

[CHAOS]

I would also say that if the parent provided the money, is signatory and controls the account then the parent is the one who declares the interest for tax purposes.

SO does my father have to provide his TFN to the bank to stop the 46.5% being withheld? - he is the depositor, signatory and controller, we just get the statements.

 

[CHAOS]

For investors with pre-school kids.

Do your kids have TFNs?

 

[alexlee]

For investors with pre-school kids.

Do your kids have TFNs?

The question is what you would use the TFNs for. The only real reason pre-school kids would need TFNs would be for bank accounts in their name. Even if the kids had their own savings, it would be better financially to keep the money against the PPOR offset, say.

 

[BMW]

The question is what you would use the TFNs for. The only real reason pre-school kids would need TFNs would be for bank accounts in their name. Even if the kids had their own savings, it would be better financially to keep the money against the PPOR offset, say.

We created a child saver account but never ended up using it, the kids money is sitting in one of our offset accounts atm. when we stop having kids we will separate the money and buy something long term like index funds or something.

 

[Terry_w]

My father has set up a trust fund bank account for my son. The bank is withholding 46.5% of the interest each month. He is earning $20 a month (before tax withheld) in interest so a long way off the $416 pa at this stage.

Do I need to organize a TFN for my son and have my dad give it to the bank?
How do I get back the last 2 years interest that they have withheld?

I think banks have to withhold tax if no TFN. Your kids may need to lodge a tax return to get the tax paid back.

It is well intentioned, but it is probably better for your dad to invest the money in his own name and then gift it over when the kids are 18. You should also encourage him, and yourself, to set up a testamentary discretionary trust in your will. Under current laws kids can earn up to $20k in income from a testamentary trust - but someone needs to die for the trust to come into existence.

 

[redwing]

Watch out if your kids earn more than $416 pa from unearned income.

The kids would have to have a fair whack of cash to get that in annual interest, though in saying that, the 7 year old earned $120 last FY

re TFN i see ING online accounts request one also, worth getting one for the kids?

Our kids bank weekly either by savings accounts or term deposits, but the oldest recently had a 6 month deal with Bankwest Telenet Account and is now looking at online options (ie ING)

We get them to count money, carry bankbooks, deal with the tellers etc and have been doing so for years