Putting accounts in kids names?

amberbamber · #1 (**permalink**) 08-23-2006, 01:38 PM

My 4 year old daughter has $250. We'd like to put it in a CD (unless anyone has any better advice for better interest). And I actually think I'd like to tier the CD like $50 in a one year, $50 in a two year, etc, etc.

Should we put this account in her name or ours?

I'm thinking ahead here for Financial Aid applications, etc.

And our daughter does have a 529 plan already. I just want something that she doesn't necessarily have to use for her education, although it would be NICE!

sweeps · #2 (**permalink**) 08-23-2006, 01:47 PM

Generally speaking it's better to be in your name and not your daughter's because your expected contribution percentage is much smaller than hers is. But honestly, it won't make any difference for another 12 or 13 years. Financial aid rules change all the time, and they could be a lot different by the time 2020 rolls around.

amberbamber · #3 (**permalink**) 08-23-2006, 01:53 PM

Quote:

Originally Posted by Sweepsplayer

Generally speaking it's better to be in your name and not your daughter's because your expected contribution percentage is much smaller than hers is. But honestly, it won't make any difference for another 12 or 13 years. Financial aid rules change all the time, and they could be a lot different by the time 2020 rolls around.

Thanks...I figured the rules would be changing, just wanted to kinda stay ahead of the game.

Snoopy2645 · #4 (**permalink**) 08-23-2006, 03:04 PM

You may want to check around I think most minimum amounts for cds are around 5 k

PrincessPerky · #5 (**permalink**) 08-23-2006, 05:29 PM

really? wow, when I was a kid I got one for like 50$....

greedy4chips · #6 (**permalink**) 08-23-2006, 06:01 PM

Currently online savings accts are paying relatively close interest rates when compared to CDs.

I used to recommend iBonds because the interest is tax free when used for education, but they are paying only 2.41% now vs 6.73% before April.

Roth IRA experts can tell you if you can open one for students. I think you can take the money out tax free for education too.

LuxLiving · #7 (**permalink**) 08-23-2006, 07:02 PM

Hi Snoopy - INGdirect.com will let you put small amounts back in little Certificates of Deposit. And, yes, even ladder them. We do it all the time!

Snoopy2645 · #8 (**permalink**) 08-23-2006, 07:38 PM

oh really I didnt know that. Thats much better than 5k isnt it?? I wonder if above poster isnt thinking savings bonds though & not cds??

greedy4chips · #9 (**permalink**) 08-23-2006, 10:00 PM

I just spoke with a representative from ING Direct. Here is what she said with regards to opening CDs.

There is no minimum deposit to open a CD. 6 months is the shortest term CD they offer. 5.0% is the current rate.

However you will be better off opening an Orange Savings account to earn the $25 referral bonus. This allows you to earn more money on your deposit. Then after 90 days move the money into CDs as you see fit. You may also refer other people and earn $10 per person up to 25 people I believe.

An even better option may be to open a Virtual Bank savings acct. Deposit $100 min. and earn a $20 referral bonus. You may refer up to 50 people and each of you will earn another $20 each if they deposit min $100 and use the link in the refer a friend email that Virtual Bank sends them. They pay 4.5% on their eMoneyMarket acct vs 4.35% for ING Direct savings acct.

Virtual Bank wants $10k for a minimum deposit to open a CD though.

Open both for her $100 as a gift from you and $250 from her. As you refer friends she can pay you back the $100.

If you have any other questions about these offers just shout!

amberbamber · #10 (**permalink**) 08-24-2006, 11:55 AM

Thanks for all these great ideas.

So, I just have to open an Orange account through ING and then after 90 days close it and transfer the money over to CD's? Am I understanding that right? Is the Orange account just a savings account?

And I wouldn't have anyone to refer to open an account so that wouldn't really be worth it for me.

Thanks again!

LuxLiving · #11 (**permalink**) 08-24-2006, 11:59 AM

You wouldn't have to close it - leave the little bit of interest in there and add to again in the future.

I think Jeffrey and Nate have a plan here to help you with those uneeded referrals that just might add to the kitty. Worth your while to check it out!

Yes, Orange account is just a savings account. You can add subaccounts for each account.
For example....Main Account could be your Emergency Fund, subaccount could be Childs College Fund, a third could be for Car Repairs, etc.

amberbamber · #12 (**permalink**) 08-24-2006, 12:03 PM

Ok explain to me the subaccount thing? Am I a loser or what?

LuxLiving · #13 (**permalink**) 08-24-2006, 12:09 PM

Not a loser - a learner!!! I think the way you do it is log in under your member account number and pin, then you can just 'Open An Account' and nickname it whatever you want to - such as Amberbambers Hidden Stash - then stuff in a few dollars from your linked checking account. Then repeat. 'Open An Acccount' and nickname it Amberbamber Munchkin#1 College Fund, and so on and so forth.

Then each payday or whenever you pay bills, pay yourself first into these subaccounts...or whenever you get a little money put back. I do Saturday bank runs of the extra change left at the end of the week and stuff it back into one or the other of my subs...there it starts right into work earning me interest.

Each time you log in -the main account and the subaccounts, are all there listed on one page. A budgeters dream!!

greedy4chips · #14 (**permalink**) 08-24-2006, 03:04 PM

Ok I just spoke with ING Direct rep again because we are going to refer my friends and their daughter...see my other post on her...15 yr old and no concept of savings interest...

I am referring the mother, named Tracey. ING sends Tracey an email with a link and a message explaining what it is for. Tracey clicks the link and signs up for an acct in her name only and she gets $25 bonus when initial deposit is a minimum of $250 through automatic transfer from checking acct. ING will then make 2 small deposits of less than a $1 each. You must verify these amts before withdrawing the funds. This is just for security reasons.

At that point Tracey is then able to refer other people the same way. So Tracey refers her hubby and he opens an acct the same way. Now she can refer her daughter and open a JOINT acct since she is a minor.

Tracey gets $25 bonus + $10 for referring hubby + $10 for referring daughter + hubby gets $25 + daughter gets $25. They are making $95 just for opening 3 accts and depositing $750 total into 3 accts.

They also have 23, 25, and 25 more referrals to send out to friends and family to earn a possible $730 = ( (23 + 25 + 25) * 10) in referral bonuses.

Jeffrey has a links available for referrals here...ING $25 Bonus Links

Also a step by step instructions to follow.

Let us know if you need anymore help!

I got my $25 immediately when I opened my acct.

There are other bank offers similar to this if you are interested in making a bunch of referral bonuses.

amberbamber · #15 (**permalink**) 08-26-2006, 09:27 AM

Thanks for all of this information. Monday I plan to open my daughter's account

Thanks again!

Saluki96 · #16 (**permalink**) 08-28-2006, 11:45 AM

I also used one of those $25 dollar referral's and it was also put in immediately. The only accounts I have at INGdirect are my kids. I did it for the same reasons. So I could buy CD's. The account was set up very quickly. It's a nice interface and site, but I don't keep our(wife and I) savings their because of the interest rate.