I would like to give money in some form to each of my nephews for Christmas. I thought about opening a savings account for each of them in their name and my name, is this even possible? Also, while their mother is getting her college degree they are using government assistance, food stamps, medical card, etc, if they have a savings account will this affect their assistance?
Would a bond be a better route than a savings account and who pays taxes on interest of a savings account? I need suggestions on how to go about this please. Thanks in advance.
2007-11-20 02:07:57 · 7 answers · asked by jilldaniel_wv 7 in Business & Finance ➔ Personal Finance
Yes and yes. You can set up a joint account with anybody and yes, it may affect their government assistance. I think a savings bond is a better idea because it won't kick in for years and therefore it won't really change their income status. Set up a trust for the kids and put the savings bonds in it.
If you do set up bank accounts for them, make sure they are really "savings accounts" alone. Some banks will trick adults into setting up accounts that actually have bank fees that would drain the money out over time.
Also, consider whether their mother might be tempted to use the accounts for financial purposes by putting bills in the kids' names or signing them up for credit cards. That could lead to the kids having credit ratings before they're ready. I don't know if she'd do that of course but I've heard of mothers who do those things.
2007-11-20 02:22:32 · answer #1 · answered by artsy_lovely_lady 5 · 1⤊ 0⤋
Yes, I started a savings account. It was weird to me, cuz my parents didn't do that for any of us, but everyone seems to be all for them, so I went ahead. I only contribute $5 a week. My intent was not to have it to pay for my daughter's college, just to have something for her to start out with and be helpful, whether it's for her first car, or insurance, or to help with college. My daughter is now 4 yrs. old, I didn't start it right when she was first born, but when she was still a baby. I figure she'll have at least $4500 in the account when she's 18 and has access to it. Oh yeah - I recently took a big chunk of it and put it in a CD at a local credit union - rates are much higher there than the $0.08 she may earn on each statement from the bank currently. Hopefully that will add up if I keep doing that, and her account can grow more that way too, since I don't plan on ever touching the money myself for anything.
2016-05-24 07:55:53 · answer #2 · answered by ? 3 · 0⤊ 0⤋
Get U.S. Savings Bonds. A lot of economists will tell you this isn't the best way to grow money, but it's a great way to establish a small savings plan for young people. The bonds I purchased came in very handy when my son went off to college... 45 bonds at $50 each ($2,250) turned into $6,000 by the time we redeemed them. I just wish I hadn't listened to the economists and stopped purchasing them...
2007-11-20 02:16:46 · answer #3 · answered by mJc 7 · 1⤊ 1⤋
Are these kids college bound? Your state has something called a 529 college savings plan. The money deposited in this account grows tax free, you get a state tax deduction and it has no impact on the kids assistance. Please read my profile and contact me to chat.
2007-11-20 02:35:31 · answer #4 · answered by Richard Jackel 3 · 1⤊ 0⤋
get them a bond because if they have a savings account it will affect there assistance after a certain amount is in there.
2007-11-20 02:16:28 · answer #5 · answered by glamour04111 7 · 0⤊ 1⤋
ESA (Education Savings Account) or 529 will be your best option if you want them to save for school.
2007-11-20 02:47:45 · answer #6 · answered by scottsmylie 5 · 0⤊ 0⤋
Personally, I would not like the idea of someone other than myself having access to my child's money. Without being a legal guardian, I don't see how you could opent eh account anyway. A bond is a much better idea.
2007-11-20 02:16:09 · answer #7 · answered by leaptad 6 · 0⤊ 3⤋