Long term gift/investment

[bella12]

Hi all. I just seen on sunrise a lady who was buying two bottles of Grange on behalf of her son who buys two bottles every year for his son to give him when he turns 21. Nice little gift/investment idea, although to impractical for me, where would you store all those bottles?! Anyways, got me thinking. I've opened a bank account for my 5 month old which I've already started putting his Christmas gift money etc. into and when I'm back at work will make more frequent deposits (maybe $5 a week) for him to access when he's either 18 or 21. Haven't decided on that yet. I was wondering if anyone else does something similar or has any other ideas about what a good long term investment might be to hand over to their child TIA

[~Hestia~]

We have term deposits for both of our boys, we put in a fortnightly amount as well as their money box coins. Their grandpa contributes as well. We imagine giving it to them at some stage, when they turn 21 or have completed tertiary education or something applicable to them.

[Rowellen]

We put the kids baby bonus into shares for them - in our name but with their name as the account. The dividends are paid into an account in our name but kept specifically for them. I haven't decided if we will actually let them have it at 21 or whatever. It depends whether we survive financially for that long and also on how they behave with money. We might consider holding specifically for a house deposit or something if they are spenders.

[KittyK]

I put $10 a week in an account for my son and I added any money his granddad gives him and money he got at his birthdays. I will do the same for this baby when born. My plan is to eventually give the money too them when they are at a responsible age.

[Tinks]

We bought our girls a diamond necklace each with money from an inheritance.

[~Gee_Whizzy~]

we have a two high interest savings account for each of our girls. $40 goes into each account every week. also any money they get for bdays, Christmas or special occasions also goes in too. We haven't decided when they will have access to it though. guess it will be depend on how they are with money.

[Mrs O'M]

We have a high interest savings account for DS. All money he gets for pressies goes in there as well as the baby bonus. We also pop in $50 a fortnight for him. Like everyone else we will wait and see when he has access to it.

[Mrs P]

We have a high interest savings account for DS. All money he gets for pressies goes in there as well as the baby bonus. We also pop in $50 a fortnight for him. Like everyone else we will wait and see when he has access to it.

We've done this too except don't currently add the $50 a fortnight. She's got about 8.5K! Once DS has an account set up we will probably start adding a contribution for each of them per month.

[Teeki]

DD has an account in trust for her. We transfer $10 a week and put in any money gifted to her. She has a giant piggy bank that we put coins in throughout the year, then on her birthday we empty it and put it in her account. Not sure when we'll transfer the account to her, but in the years before we'll be discussing it with her and guiding her towards a sensible use for the money.

We'll do the same for the wriggler when he/she arrives.

[Astrid]

What ever you do, check out the tax implications. The ATO has cracked down on parents who hide their own money and interest earned under their children, so the average parent trying to put aside money for children now may be liable for tax:

Children's savings accounts
Income of individuals under the age of 18

[Rowellen]

That is true Astrid. That made a factor in our decision to keep everything in our names. We'll wear the tax if any and if we need the money, we will still have access to it and they wouldn't be any the wiser. Children can't earn much at all before the tax rate gets stupidly high.

[Teeki]

Great point Astrid. In my example, the account in my names and DHs, in trust for DD. So we "earn" the interest and pay tax on it.

[~Gee_Whizzy~]

We (well DH, pays the tax on the interest earnt on the accts when he does his return ). we had to provide his TFN when we set up the accounts

[Mrs O'M]

True, we hold the account in our names, but DS also has his name on the account for tax purposes

[bella12]

Wow. Thanks for all the responses. I wondered about the tax implications after my credit union said they don't do kids accounts and that I can open an account in my name and have bubba as the trustee. Which wasn't ideal for me only as I would have super easy access to that money. So I went to a new bank and opened up an account in bubbas name only with me as signatory so that's much better but yeah, I guess for tax purposes it is 'hidden'. Interesting!!