Best starting savings plan for new babies?

Question

I am having twin boys in July, and would really like to set up some kind of account or savings bond or something for them. Ideally, it'd be something I can add their birthday/holiday money to also over the years and would collect interest. Not neccesarily a college fund, but a nice little nest egg that they can have when they are old enough.
Also, are there any plans that would allow for a smaller initial investment. With twins coming, money is tight, as you can imagine. Regardless, I feel that I have to do something like this for them.
Thank you for your suggestions. :)

Answer 1

Additional information for the babies' savings. As soon as they are born, apply to get them each their own social security number. Then you can open the accounts in their names with you as administrator, (since they are minors.)
If a financial emergency arises, it's a harder decision to dip into their funds if they are listed in their names. (There are some tax consequences to this, you might speak to the person who helps with your income taxes.)
As an alternative to the 529 plans, you can start mutual fund accounts for them with some companies for as little as $100.00. Do your homework through and check how much the funds charge for fees and chose one with a high rating and low fees. If you deposit just $80-$100 per month for each of them, starting this early, you could reasonably expect to have in the neighborhood of $40,000 each for them to start college.
By the time they are ready, that won't be enough for college, but as your income rises, so can your monthly contributions. Good-luck. This birth will start the very best part of your life.

Answer 2

Savings Plan For Baby

Answer 3

This Site Might Help You.

RE:
Best starting savings plan for new babies?
I am having twin boys in July, and would really like to set up some kind of account or savings bond or something for them. Ideally, it'd be something I can add their birthday/holiday money to also over the years and would collect interest. Not neccesarily a college fund, but a nice little nest...

Answer 4

Don't buy bonds - they are a terrible investment. Series-I bonds do have an inflation factor built in, but that doesn't make them a "good" investment...they still pay a very low interest rate.

If you're not interested in a college account, look into some mutual funds for them. If you can save a little money before they are born and open an Ameritrade, e-trade, fidelity, etc account, then buy a few shares of the mutual fund when you can. Don't hop around from fund to fund, pick one with at least 10-15 years of history with good returns (15% life to date is a good bench mark). These funds are not guaranteed, but the chance a losing your money in a well managed fund are very low.

To compare, I-bonds earned approx 5% last year, my lowest performing mutual fund earned 16%.

Good luck!

Answer 5

There are a few options. First I would recommend that you ask for I (eye) Bonds if you are having a baby shower. I bonds are bonds that you buy for full price like EE bonds that are half price. I bonds start receiving interest right away and you can have them make money for 30 years. And you can get them for as little as 50 dollars, so its not a costly gift to ask for.
Second you can talk to your bank and ask them about a 529 college fund. You can add to it over the years but its strictly for there education, one less worry for you down the line.
Third, you can open an UTMA account, low interest but you can add to it any time you want as its a savings account. You might also want to talk to the banks investment rep, its free and you can get some great advise as to what else is out there. I commend you for wanting t odo this..it really down't take much to start saving..just ask for those bonds when people ask you what you need for the babies.
Congratulations and good luck!!

Answer 6

I'd recommend a 529 plan as a good college savings vehicle that grows tax free. Your state may offer some tax deductions for contributions made to your 529 plan.

If you don't want to save for college, you can set up an account with www.treasurydirect.gov and purchase government savings bonds. You can even schedule them to be automatically purchased on your child's birthday. Your account links directly to your checking account for easy money transfer. The bonds are stored electronically...they don't send paper any more.

Good luck

Answer 7

Congratulations on your babies. They're lucky to have such a conscientious mother.

The simplest thing to do would be to buy U.S. Savings Bonds for them. The I-Bond, which increases in value for inflation, is probably the best bet, because who knows how bad inflation will be in the next 18 to 20 years? You can buy Savings Bonds through many banks. But you hope to add money to the boys' savings over the years, so you probably should buy the Savings Bonds directly from the U.S. Treasury, through a website called Treasury Direct (see the link below). That will make the recordkeeping simple. You can buy Savings Bonds in very small amounts--as little as $25 through Treasury Direct.

If you want to save for college, U.S. Savings Bonds actually provide a tax shelter for people saving for college expenses whose incomes do not exceed certain limits. See the webpages listed below for more information.

Answer 8

I have to agree with Freedom Rings - if you live in the US and want to save for their college funds than a 529 plan is your best option. Plan grows tax free but I would add that distributions used to pay for college are also tax free.

Answer 9

Old enough is 65. The miracle of compound interest can give them a comfortable retirement. Check out ricedelman.com. I think they are probably out of your budget range, but you can learn a lot there.

Answer 10

If you live in Canada, RESPs are pretty cool.

Example:
http://www.respresourcecenter.org/respinfo.html