Best account for new born

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Forums › Finance and wealth management › Best account for new born

David321

234 posts

Master Geek

#289746 27-Sep-2021 10:50

Hi all,

My wife and I are looking to put some money away on a regular basis for our new born, and her birthday money we receive for her from family etc will also be put away for her.

As the interest rates at the banks are terrible for saving I was wondering if there was any other options the would be more beneficial?

I know of sharsies, perhaps this could be the go, or the other option could be talking to an investment broker and setting her up some sort of portfolio similar to kiwisaver, but not kiwisaver so she can take it out before retirement age. Although the second option might be more difficult when it comes to putting money in and keeping an eye on the balance etc? then there is the possibility a broker may not be interested in setting us up with a portfolio for an account which will only be trickle feed as there would be less commission for them?

Any ideas would be great!

_David_

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770 posts

Ultimate Geek

Lifetime subscriber

#2784783 27-Sep-2021 11:00

You may want to look into managed funds. Actually I am in the process of doing the same for my kids, I've built up an amount and now looking to put it into a fund.

I am still looking at options but for example Fisher Funds is one that is on the list. I still need to research the admin costs and how to manage ongoing contributions, all new to me as well

MightyApe

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dt

1089 posts

Uber Geek

#2784787 27-Sep-2021 11:04

Have a look at Hatch for kids account, only 50 cent trading fee on kids account then take a look at some of the vanguard ETFs, VTI is a good starting point [vanguard take a VERY low commission]

This is what I have done for my son

Your daughter will have an account code you can give out to any family and friends to deposit money for bdays, christmas, milestones etc

freitasm

BDFL - Memuneh
74171 posts

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Geekzone

Lifetime subscriber

#2784790 27-Sep-2021 11:14

I am using Sharesies (Geekzone aff link). Created an account for our daughter, specified the age she can access the funds and have been investing in funds through it. A lot faster than Hatch to get the funds and transactions done to be honest.

freitasm on Keybase | My technology disclosure

blackjack17

1507 posts

Uber Geek

#2784798 27-Sep-2021 11:28

Also use Sharesies. Have been putting $20 a week for the past year and a half (plus a couple of small lump sums) or so and both have over $2000.

Inlaws have opened a co-op account for them and that is making 2%

Electric kiwi signup credit Sharesies credit

duckDecoy

568 posts

Ultimate Geek

#2784799 27-Sep-2021 11:29

dt:

Have a look at Hatch for kids account, only 50 cent trading fee on kids account then take a look at some of the vanguard ETFs, VTI is a good starting point [vanguard take a VERY low commission]

For our son we put $x each month into international ETFs via superlife. They handle the tax for us, and charge lower fees for children. Was a decent compromise for us than doing it directly.

BTW from memory fisher funds had far higher fees than others we considered.

BTW just note that you might be responsible for tax if you directly invest in overseas (excl Australia) shares or funds. https://www.stuff.co.nz/business/money/114865350/budget-buster-investing-in-overseas-shares

dt

1089 posts

Uber Geek

#2784803 27-Sep-2021 11:41

duckDecoy:

For our son we put $x each month into international ETFs via superlife. They handle the tax for us, and charge lower fees for children. Was a decent compromise for us than doing it directly.

Thanks for sharing, just had a read through and their fee is reasonable given it's fully managed

I was in the same boat and excluded fisher funds as an option, good returns but fees are rather high..

My mother has just started contributing to our sons hatch account [which I estimate I spend <30 mins a month splitting contributions between VOO,VTI and VOOG] but now considering putting her contribution into superlife :)

nickb800

2640 posts

Uber Geek

Trusted

#2784804 27-Sep-2021 11:46

We have a managed fund (non-Kiwisaver) with Simplicity for this purpose. Key thing is to set it up in their name and use their IRD number (should have one from setting up Working for Families/BestStart) so the tax rate is appropriate.

timmmay

18586 posts

Uber Geek

Trusted

Subscriber

#2784814 27-Sep-2021 12:00

We set up a Fisher Funds fund in my son's name. I think they're the biggest managed fund provider in NZ, we've used them for years. We also use Simplicity for other things, they look quite a safe bet as the public trust holds the assets and simplicity just direct investments.

rhy7s

494 posts

Ultimate Geek

#2784815 27-Sep-2021 12:00

Still going around in circles myself on this topic, just saw this page which covers a few options other posters have mentioned https://moneykingnz.com/how-to-invest-for-kids-in-new-zealand/

afe66

2920 posts

Uber Geek

Lifetime subscriber

#2784842 27-Sep-2021 13:12

Passive index share units.

Smartshares sort of thing.
Setup direct debit to make regular monthly purchases and tick the box for reinvesting the dividends and ignore for years.

duckDecoy

568 posts

Ultimate Geek

#2784844 27-Sep-2021 13:15

afe66: Passive index share units.

Smartshares sort of thing.
Setup direct debit to make regular monthly purchases and tick the box for reinvesting the dividends and ignore for years.

+1, but not through smartshares directly if its for kids, go via another fund who can buy smartshares plus give kids some tax rate and fee advantages that smartshares doesn't

For us we went with smartshares via superlife.

jonathan18

6201 posts

Uber Geek

Trusted

#2784845 27-Sep-2021 13:15

As is clear from the range of replies, there are a lot of options out there!

I've set my kids up with managed funds (Kiwi Wealth in their case) for which they elected what proportion of their savings account balance they transferred across and then what proportion of that went into which fund; they also then have the choice where to put their weekly savings we give them (same amount as their pocket money; they always select the managed fund!). They're clearly older than your child, but one is never too young to start to learn about this stuff! (joke...)

Whether you go with Sharesies, Hatch etc or managed funds may be affected by how much involvement you want in the process - personally, I found I didn't have the skillset (or the interest in building the skillset) to appropriately manage my foray into Sharesies; I've since switched those funds into Simplicity managed funds, and while I've not been overwhelmed by the returns it's certainly been minimal hassle. Equally, when we've paid the mortgage off next year I'm looking to use similar funds with Milford to build savings for the kids' education etc (no complaints about my Kiwisaver with them...).

phrozenpenguin

668 posts

Ultimate Geek

#2785350 27-Sep-2021 22:29

Investnow - no fees, easy to setup child account(s). Can do lump sum or regular payments.

Make sure you chose multi-rate PIEs in order to streamline tax (will be taxed at childs marginal rate, likely 10.5%), not listed PIEs like Smartshares ETFs (and others), which are taxed at 28% regardless (which you would have to do a tax return for child in order to get back).

dfnt

1394 posts

Uber Geek

Lifetime subscriber

#2785362 27-Sep-2021 23:54

I’m doing sharesies and Juno KiwiSaver for our daughter

tukapa1

599 posts

Ultimate Geek

Subscriber

#2785929 28-Sep-2021 21:22

Milford investment account and Juno Kiwisaver for my son.

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