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  1. #1
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    Default Children's bank accounts...?

    My toddler has a bank account in the UK which has steadily had money paid into it since he was born. We're thinking of moving it over to Australia as the exchange rate is pretty good so he will get a few grand out of it, and it's probably better for him to have it here than there.
    We'd like to put it in a bank account for him. We plan on continuing to add to it every fornight throughout his life and give it to him at 21/25/when he leaves home/goes to uni/backpacks the world....not sure exactly when yet as you can see, but not for a long time, so he should have a good stash in 20 tears from now. We want something he can't touch. A good interest rate. I'm not sure where to start. In the UK they have ISAs (a savings account where you don't pay tax on the interest)...is there anything like that here? What sort of long term savings do you have set up for your kids?

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    We've just set up an account for our 3 month old. Its a high interest savings account that we will put regular deposits in (minimum 1 deposit a month but no minimum amount to satisfy the credit union). There are no fees and I am fairly sure we don't pay tax on interest (not sure if that happens here or not? I can't be sure tbh). The account can be managed by us until he is 18, but then the CU stipulates legally it is his money on his 18th birthday and we have no say after that point. If we want to wait until he has access to the money we will move it to another account before his 18th.

    Go to some banks and CU's and ask about long term savings accounts with high interest and no fees. All banks and CU would offer something. HTH

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    I have a feeling that you still have to pay tax on interest earned as the accounts are technically in your name, even if it's for your kids. Hope someone else can clarify for you!

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    Eco Goddess is offline Loving life under the Bodhi tree!
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    Our accountant told us that if ds has a certain amount per year go into his account he would need a tax file number and to do a tax return for the interest earned. Bloody ridiculous! Will try and find out the exact details

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    Quote Originally Posted by Eco Goddess View Post
    Our accountant told us that if ds has a certain amount per year go into his account he would need a tax file number and to do a tax return for the interest earned. Bloody ridiculous! Will try and find out the exact details

    DH does all our financials and knows his way around this stuff so I will have to ask him if we need to pay tax on his account. It's an account specifically for DS so I thought we wouldn't need to. Will need to go check now!

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    I think they have tp have like $10,000 a year deposited then they would need to do tax.. Ds account doesnt reach that per year unfortunately!

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    I work for a major bank (which bank)

    We open childerns accounts in their names, ID via birth certificate or passbook, or through school banking program.
    Parent or guadian, is owner of account until age of 16. Children under age of 16 are exempt from paying tax on interest earnings, up to the threshold. No account keeping fees either.
    1 deposit a month to earn 3.64 interest.

    So interest earnings don't affect your taxable income.
    Some other major banks, which I've worked for. Open the accounts in your name but with ITF label. Which exempt them from your taxable income. (Advice of my acooutant)
    But there is no trust deed.

    Hope this info helps

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    My financial planner recommended child bonds. They get invested so you ride the markets highs and lows. But overall you would come out ahead if you leave it in there for long enough (more ahead than interest in a bank account).

    It's not taxed after a period of time (something like ten years don't remember sorry!). You can add to it but not more than 25% more than the previous year.

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    See my link from the ato.... I was under the impression that children were exempt up to a threshold, because I also used to work at one of the big four banks.... I would check ato about it to be sure


 

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