save money for my son??

Question

he's one year old and i want to start saving for his future. He has one of those child trust funds (with the money from the government?) that i have been putting extra money into - but is this really the best place for it or would i be better off with a different kind of account? There is so much choice i don't know what to do for the best!!

Answer 1

My little lad has both a CTF and a bank account.

We put £10 a month into the CTF and any gifts he gets from family and friends goes into his bank account.

The trust fund can't be touched 'til he's 18 - but at least he can have the bank account whenever he needs it.

Answer 2

It's called a 529 plan (a.k.a. Coverdell Plan) and how much you pay on taxes depends on what state you live in. Junior doesn't get taxed for withdrawing from it as long as it's strictly to cover school expenses. Your contributions I believe are taxed at your income level. If I remember correctly, Illinois doesn't offer tax incentives to parents who contribute to it. You'll have to find out yourself since the tax law continously changes for it.

If you use it to pay for jr.'s tuition, it may or may not reduce his financial aid package but don't sweat it, that's what low interest government loans are for.

Answer 3

i don't know about the government trust funds but the post office offer tax free accounts for kids.

Answer 4

My kids money is in the Bradford & Bingley @ 5.5% per year.First savers account

Answer 5

Your best bet is to put it in a jar and do not mess with it.
All these banks and government accouts want your money so they can use it. Put it in a jar and do not worry about all the taxes and stuff.

Answer 6

i would use a building society that way he'll be a part of the process, and if the bs becomes a bank he'll be due a windfall