Childs Savings Account Best Options Long Term

I

IrishGunner

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Ok did what every parent did and opened a credit uniion account and now has reached its limit so looking to move it

Long term option 5+ years and will be reguallay saving into it monthly and no plans for withdrawel of funds even in emergency

Was looking at Bunq and Raisen and also checked out the best buy topic. Wife wants Post office savings but want to consider all options and maybe looking at trf Cr Union savings to new account

Whats the best out there at the moment
 
The main decision is to keep it in your name or have it in their name.

Pros and cons of each,

Their Name:
Pro: You can transfer 3k per parent to them tax free per year without impacting life time limit.
Con: They have full control at 18.

Your Name:
Pro: you control beyond 18.
Pro: You can pay for college education, college accommodation and a wedding tax free
Con: If your child doesnt go to college / get married you don't get the above tax free transfers so might impact cap.

I am leaning on keeping it in our name.
 
DeeKie said:
I might put it in their name and tell them about it at 21/22
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This is a bit shonky, both ethically (why are you trying to deceive your adult children over funds that are their property and not yours?) and from a revenue point of view (the way you are treating this account contradicts your claim that the money you put into it was a gift to your children; you are still trying to control when and how the money is used, so what you are actually doing is trying to make it look like a series of annual gifts of under €3k when in truth what it really is is a single gift that won't be given until they are 21/22 and will then be much larger than €3k).

The only way you can make use of the €3k annual small gift exemption is actually to make gifts. Anything you do that undercuts your claim to be giving this money away is counterproductive, in terms of availing of the small gift exemption.

I get that you are concerned that your kids may not have the judgment and maturity at age 18 to handle a relatively large amounts of money. But the proper response to this is; don't give them more than you think they can manage until you think they can manage it. Don't be swayed by tax considerations into making gifts of money that you would not otherwise make. And don't try to take advantage of tax reliefs for gifts while at the same time not really making the gifts.
 
There should probably be a separate thread on the whole savings 'in childs name' 'in parents name' / annual small gifts tax exemption etc.

Else, this thread goes completly off topic.

There seems to be a major fear that the kids, that the parents have responsiblity for, are not going to turn out like them i.e be sensible with money.
 
GSheehy said:
...with no money guidance whatsoever from their less fortunate or finacially illiterate parents, perhaps.

People have to trust their parenting skills at some stage, their kids don't lick their knowledge from stones.
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I’m not sure about that. Most people’s parents would know the basics of budgeting if not up on tax and investments.

I can understand parent being a little nervous. 18 years of children’s allowance at todays rate is about 30k. Add in interest and inflation and you could easily be in the 40 to 50k. Double that if they were maxing out the gift.

The parent could see this as a colleges fund and or house deposit. So an 18 year old needs to budget that over 4 plus years while possible living away from home for the first time and having all sorts of opportunities, needs and temptations.

There might not be spare cash if it runs out after 3 years. Most people start budgeting on a weekly or monthly basis and perhaps only covering some items. They also likely work min wage for it so know the value of earning it.

I don’t believe in hiding a gift from a child but can understand being a little nervous of handing over the college fund to an 18 year old.
 
I have no idea how my parental skills are but unfortunately I don't think it's always enough when you speak about teenagers/young adults and their attitude to money. I think my 15 years old is already saving for her house deposit while my 18 years doesn't have any concept of money. And thinking about it, my financial approach has always been wildly different from some of my siblings.
 
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But you're only putting it in the childs name because you know now that they're very likely going to have an inheritance tax issue, right?
 
GSheehy said:
But you're only putting it in the childs name because you know now that they're very likely going to have an inheritance tax issue, right?
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No one knows what the limits will be or when they will die.

Many don’t know what they themselves might inherit.

I suspect most people fall in the maybe / possibly tax payable band.
 
I would think that the inheritance issue concerns relatively few parents though as my understanding is that you can finance their education, their wedding without tax implications. Then you can as a couple decide to give them 6 k a year (360k for 2 children for 30 years). Personally even for tax purposes, I would struggle to give access to 108k to my 18 years old. I think he would make better use of 70 k a bit later on in life.
 
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