What should I do with my children’s small savings account balances?
What should I do with my children’s small savings account balances? My children are 9 and 11. They each have ~$5K of savings, and I’d like advice about where to put it. This is their money, given to them as gifts as they’ve grown up. I plan for it to be theirs, once they are in college and starting life on their own. We are saving for college separately for them in 529s. Should I just stay simple – local credit union savings account and/or CDs? Online higher yield savings account? Vanguard investment? I’m looking for deposit convenience, maybe a slightly better rate than a savings account, but with no risk. Thank you!
Terry Says
Frankly, it’s not going to matter what interest you earn on such a small amount of money. BUT, it will have an impact on financial aid for college. I’d suggest cashing in those accounts and putting the money in the 529 account, where it will grow tax free for college — and NOT be counted as a child’s asset for future financial aid. Do it now!
