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mutual fund investment for grandchildren

By Terry Savage on April 16, 2021 | College Savings / Student Loans

I only have 2 grandkids and I want to open a financial mutual fund for each of them. I want to starrt them out with $1200.00 each,they are 16 and 18yrs.old.Is this a good idea? and what would be a good mutual fund to open? Thank you….Jan

Terry Says

No this is a terrible idea. Money held in a child’s name weighs very heavily against the family in the Federal financial aid formulas. This is something you should have done years ago in a 529 College Savings Plan, where the money grows tax free to be used for college expenses.
At this point, you might offer to pay some of their college tuition bills each year –and set some money aside in your own money market account to do just that.

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