Investing Children's Allowance Options

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faketales

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We are fortunate enough to be able to put the Children's Allowance for our one year old aside.However I am confused at the options.

Option 1:
An investment account in my child's name.
However I don't understand what level of tax applies to them.
Once I set it up in his name can I take the money out? Change to a different product if better value? I understand I can stop paying in.
The advantage seems to be that I can fit him the money under the small gifts allowance of 3k a year. Downside is it's his money to do what he likes with at 18. Right?

However I can pay for his college fees and accommodation exempt from CAT anyway. So if the purpose of investing the Children's Allowance is for college it doesn't really have an advantage. For the real advantage he would have to keep this money for after college.


Option 2:
An investment account in me or the wife's name that we put aside for when he needs it. This might be earlier if he had some need or there is a real family need. We can still pay for his college and if we chose could max out the gift transfer if we came across loads of case. I presume we could change product easier also?

Option 2 seems to make more sense. I am confident in our descipline not to touch it. Nor do I feel we are in a position to be handing over thousands and looking to minimise tax.

Have I got this right? I have seen this account https://www.zurich.ie/savings-and-investments/savings-options/childs-savings/

Any thoughts?





I have seen these mentioned: https://www.zurich.ie/savings-and-investments/savings-options/childs-savings/
 
ClubMan said:
Whatever about your specific questions, you might find some useful info here...


Also, it usually doesn't make sense to "silo" your savings/investments - e.g. fencing off the "college fund" from your other savings/investments - rather than taking a more holistic approach to your overall financial situation, savings/investments, debts, etc.
Click to expand...

Thanks. I had searched children’s allowance but this provides better results.

I won’t disagree in theory but there is something about putting aside a separate stream of income for a specific event rather than adding it to the rest.
 
faketales said:
I won’t disagree in theory but there is something about putting aside a separate stream of income for a specific event rather than adding it to the rest.
Click to expand...
I've made the same mistake myself in the past...

Late 30s Couple, 2 kids, Seeking Guidance to Optimise Family Finances

Long time reader of the forum and would be very interested in people’s thoughts about our own situation. In the last 3 years my wife and I got married, had a baby, bought our first home, and replaced one car, so our savings have taken a huge hit. We also have a second baby on the way early next...
www.askaboutmoney.com
 
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