different types of savings accounts?
My husband and I want to start a savings account for his neice who is about 18 months old. Her father, my husband’s brother, passed away almost a year ago. The baby is living with her mother and maternal grandparents and is currently receiving death benefits to help with everyday expenses. So we would like the money we save to eventually be used to help buy her first car or as a graduation present, possibly even for college. We have around $6000 for the initial deposit and we would hopefully be able to put in at least $100 each month from now on.
What type of savings account would be best?
What type would earn the most interest?
Is there a better option than a savings account?
All help is appreciated!
I am not a fan of savings accounts at local banks.
They pay no interest.
I would open a discount brokerage account.
Charles Schwab has a savings account that pays 1.75% interest.
You would open a custodial savings account.
You will need her social security number and your name will be listed as the custodian.
You could also open a ROTH account for her.
After 5 years, she could take the money out for her college without paying a penalty.
This is a good question for the Schwab people (which would be better).
The custodial account would affect her receiving financial aid.
By saving for her, you could be doing much more harm than good.
I wonder if buying savings bonds would be good – but I know I’ve lost many of mine – money wasted….
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