Best Savings Account for Kids?

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Forums › Finance and wealth management › Best Savings Account for Kids?

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mattwnz

20520 posts

Uber Geek
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#2574263 25-Sep-2020 14:40

There is essentially no incentive to save money in bank accounts these days due to the RB reducing interest rates to near negative . So it is a really bad lesson to kids, as NZers already don't save enough, and instead we are a country of borrowers.

However there is one bank that pays 2% on childrens savings accounts up to $4k https://www.co-operativebank.co.nz/everyday-banking/youth

mattwnz

20520 posts

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#2574310 25-Sep-2020 14:43

littlehead:

Money Hub has some good articles on different savings products for kids. One on Bank Accounts, Investing for kids in general, and Kiwisaver.

If it was me I would look at either Sharesies kids accounts or a low/free fees Kiwisaver. Housing is looking likely to be even more difficult in future so locking it away in a Kiwisaver and withdrawing for a first home deposit seems sensible to me. You are fully enrolling your kids in Kiwisaver though. They will always have to contribute unless they go on a savings holiday. No Government contributions until they turn 18 as well.

Governments keep tinkering with kiwisaver. I had heard that National maybe doing away with the $500 tax credit on kiwisaver meaning no real incentive to be in it , if one was say self employed. Although I haven't found any info on thios policy, but I hear them discussion it on the money show on newstalk ZB in teh weekend. . IMO signing up a child to kiwisaver where there maybe forced to contribute a % of their earnings in the future depending on future changes, may not be a good idea. IMO it is better to let the kid make this decision when they get to working age.

Sharseises maybe ok, but it is only free on deposits under $50. Then prices re half price. So $15 a year if paying in advance. That may eat into it a bit. I have been in sharsies for about 4 months, and basically after fees, my position is neutral.

antonknee

1133 posts

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#2574313 25-Sep-2020 14:48

mattwnz:

Governments keep tinkering with kiwisaver. I had heard that National maybe doing away with the $500 tax credit on kiwisaver meaning no real incentive to be in it , if one was say self employed. IMO signing up a child to kiwisaver where there maybe forced to contribute a % of their earnings in teh future depending on future changes, may not be a good idea. IMO it is better to let the kid make this decision when they get to working age.

Hopefully we don't get a National-led government then...

Would intend to agree with not signing kids up to KiwiSaver - you no longer receive a kickstart government contribution (you used to), and a child wouldn't be eligible for the tax credit/govt contribution. You may end up paying fees for no good reason, as well as locking your child into a financial product they don't want.

That said, I do think KiwiSaver is a good idea and every employee should sign up to it (with very, very few exceptions). A parent should 100% encourage their child to sign up when they get their first job.

dacraka

771 posts

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#2574321 25-Sep-2020 15:25

Like corksta & hsvhel have both said, JUNO KiwiSaver is amazing, best returns out of all the KiwiSaver providers in NZ for the growth fund according to Morningstar and they don't charge fees for kids! Amazing customer service team as well!

seoras

102 posts

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#2574325 25-Sep-2020 15:36

SheriffNZ:

Here's an alternative option recently discussed on a good local podcast I listen to - https://www.bbc.com/news/uk-england-somerset-54040307

With the sub-inflation interest rates and the economic uncertainty caused by CV19 this isn't such a bad idea.

A friend of mine built Scotland's newest Whisky distillery on the Isle of Raasay.

First bottles (needs 3 years in casks to be classed as single malt) are due around now. I've just sent him that article, I'll see if he can do me a deal.

Oh the look on my mothers face when I tell her I bought her grand kids Whisky with her money! Can't wait... :)

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