Are you going to save for a child or grandchild? Then you want a good return without major risks. 5 tips for a nice savings account for child or grandchild. http://maziliguney.com has more information
Open a savings account for a child
Parents and grandparents traditionally open a savings account for the child or grandchild at birth. On his or her eighteenth birthday he or she has a nice amount of savings together. The study of the child or grandchild is also a popular saving goal.
Saving for a child with a higher return
How can you save for your child or grandchild, with a higher return, without running any risks ? We have listed the options.
Saving for child with conditions
By making agreements with your bank, you can increase the savings interest for your child.
- Savings account for children: many banks have a special savings account for children. In addition to a slightly higher interest rate, banks often offer a present on closing or a premium on the eighteenth birthday. (Compare child savings accounts)
- Fixed deposit: if you deposit a fixed amount per month, you will receive a higher savings interest for your child. Please note: you must be able to miss this amount for the entire duration. (Compare monthly savings)
- Fixed duration: by securing the savings for your child for a longer period in a deposit, he or she will receive a higher interest rate. It is then not possible to deposit or withdraw money. (Compare deposit savings)
Investing for a child with a limited risk
In many cases investing gives you a higher return. However, you also have the chance of a negative return. Of course you do not want that when investing for your child or grandchild. With fund investing you choose whether you want to invest with more or less risk. The advantage is that the share package is composed in such a way that you have little to worry about.
Child savings account name
The name of the savings account for the child determines who has control over the savings. If you want the account to be in your name first and after the eighteenth birthday in the name of your (grand) child, then a BEM clause can offer a solution. Grandparents need parents’ permission to open a savings account in the name of the grandchild.
Tax for saving for child or grandchild
Transferring money to your (grand) child is seen as a gift. In 2017, parents up to $ 5,320 and grandparents up to $ 2,129 can donate tax-free (regardless of age) under the gift exemption. Partners are seen as 1 person. If you donate above the exemption, the recipient pays tax on this amount.
To stay within the gift exemption you can choose to give the amount in parts to your child or grandchild. In 2017 a higher gift exemption applies if you donate for the home or mortgage.
For the capital gains tax, the savings of the child (up to the age of 18) are added to the assets of the parents. In 2017, assets up to $ 25,000 (with a tax partner $ 50,000) are exempt from tax.
How much do you save for a child?
How much you will save for your child or grandchild depends first and foremost on how much you can miss. On average parents save $ 50 per month for their child. If you save for the study of your (grand) child, you must take into account an annual $ 2,006 tuition fee (2017 – 2018 academic year). This amount increases annually by a few percent.