Hi Terry-

We have savings accounts for each of our 17 (yes 17!!) grandchildren and deposit money in the accounts for their birthday and Christmas. As we all know, the interest rate on savings account is VERY low. Is there a better savings vehicle than a traditional savings account? The amounts in the various accounts ranges from $ 300 to 950.


Jim Robinson

Terry Says:   There is a better, more efficient, and more useful way to save for that amazing group of 17 grandchildren.  That would be to open a 529 college savings plan account, which can be shared by all the children in the same family.  The money there is invested in stocks, to grow tax-free for college.  Any child in the same family can access the account.  With 17 grandchildren, I can imagine that you are not in a position to contribute a large amount to get started.  You’d need $3,000 to open each account, and then can add small amounts in the future.  I’d recommend going to Vanguard to open the 529 College Account for each family.

Another choice is to give children small amounts of stock — stocks they can choose.  Read this recent column about Stockpile — a terrific way to gift shares in amounts as small as $25.  That could stimulate a real interest investing, as well as make the money grow a bit faster than in a savings account (though with some downside risk).  But it’s about time they learned about the ups and downs of money!