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Best Savings Account for Kids (THINGS TO KEEP IN MIND!) - YouTube
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where can you find the best savings
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account for your kid
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maybe you have a three-year-old son or
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five-year-old daughter
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you want to get them started have them
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develop those good
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financial habits early on in this video
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i'm going to answer three questions
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related to this
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first one is should you create a savings
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account for your child
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second is where can you find the best
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savings account for your kid
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and the third question is what are the
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tax implications if you set up that
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account
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so let's get right down to it
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[Music]
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question number one should you create a
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savings account for
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your child when i was growing up my mom
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opened a savings account for me right
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about probably when i was in elementary
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school
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and it was very exciting for me i had
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this pass book
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where i would see the deposits that i
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have made
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the interests that i was earning in my
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bank
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i'm probably revealing my age because
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i'm referring to as fast book which you
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all probably
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don't know about a pass book
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is looks like a passport and it just
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essentially
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records all the transactions that you've
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made
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in your bank account so that was really
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exciting for me having
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having that and who knows maybe that was
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instrumental
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in shaping the financial planner that i
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am today i personally think
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that having a savings account is one of
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those
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things that you can teach your child
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early on to get those good financial
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planning habits early if you're ready in
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the market
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for a savings account for your child
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question number two
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what is the best savings account for
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your kid
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in these matters we are gonna turn to
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google
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and i find an article according to a
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nerd wallet about this
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and it lists four different banks in
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terms of
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the best ones out there according to
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this article and let's take a look
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so according to this article first
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option is capital one
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kids savings account
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and upon looking more closely the rate
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is pretty competitive i mean it's not
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going to be super high given
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rates are low these days but better than
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a checking account
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easy to make online transactions no
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monthly fee which is pretty awesome
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and there's no minimum maintaining
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balance which is also great
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the second bank that they list here is
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the alliance credit
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union kids savings and looks like the
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rate is also pretty competitive
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it may have a small minimum balance
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requirement
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so that's something to keep in mind and
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i think one of the downsides that i see
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here here
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is because it's a credit union you have
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to be a member of this credit union so
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you'll have
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to do a little bit of research on what
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it takes to become a member
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third option according to this article
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is the bank of america minor savings
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account and
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i when i look at the i looked at a rate
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the rate seems
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quite low it's almost like a checking
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account so i'm not exactly sure why
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nerdwallet even listed them here the
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fourth
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option here is the becu
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early savers account bcu stands for the
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boeing employees credit union
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very competitive rates but
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downside is you apparently have to live
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or work in the washington state
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so those are the four options that are
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listed in this article
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you can choose based on this information
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and
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let me know in the comments section
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which ones you're thinking about
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so let's say you've decided on a
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financial institution
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in which you're going to open a savings
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account for your kid
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question number three is what are the
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tax implications
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of doing this does your child need to
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pay taxes
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on the interest income here she's gonna
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make do you need to pay taxes on that
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the last thing you would want is to have
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your child owe
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back taxes for several years right so
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upon looking closely at the irs website
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it looks like if the child's interest
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income is
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2 200 or less
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then it is not subject to taxes so
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keep in mind though these are kids
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savings accounts and
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a child below 18 years old is a minor
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cannot
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legally own an account so as a parent
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you will need to be a co-owner of this
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account
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once she becomes of age then you can
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remove yourself
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from this account now you might also be
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thinking about
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saving for your child's education being
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a good parent that you are
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college is super pricey as we all know
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and it's best to
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start saving early the question is
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should you
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save for your child's college education
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through the savings account that you're
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about to open
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should it be through a 529 plan or
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should it be through a roth ira which is
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one of the advanced strategies that some
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financial planner use
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for the answers check out our video on
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529 versus froth iras
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