1

I have just acquired a newborn, a would like some advice in setting up long term financial plan. I don't have a target amount in mind, just to have some money to help her when older (roughly 18-21 years). Herm mum's family is from a Chinese culture so we will receive red packets over the years as well so I would like to make sure these are managed as best as possible.

In addition to the period lump sums I will contribute about $50 a month for now, which will hopefully increase in the future.

What is the best type of accounts to start of with? and at what point (if any) should i look at changing the investment/account type?

|improve this question
  • I'm posting in the comments as these are US account types which likely have similar counterparts in Australia but may not be called the same. It depends on the goals for the money you save for the kid. College funds would go into the equivalent of an ESA (Educational Savings Account) or 529 Plan (which is just a section of tax code on how to treat the funds). If you just want to give it to the child, an UTMA (Universal Tranfer to Minors Act) would work. Please clarify your goals for the money and someone who's more familiar with Australian accounts can provide a better tailored answer. – Adam Klump Feb 5 at 5:38
  • You may also be getting gold, small rattle things that break easily. You want a deposit box or a locked box for that You can walk into any bank and open an account. The ATO will issue a TFN for a newborn as well. Some banks offer bonus interest on kids accounts. I'm not going to plug them. Watch out for unearned income penalties for larger streams, the wealthy use non-dividend shares or trust accounts to defer these. Good idea to name the benefactor when transferring so they know who to thank later. – mckenzm Mar 7 at 23:52
1

A product that immediately comes to mind is the Westpac Bump Account. But there seems to be plenty of products available, Finder has a list of such products.

You'll need to get independent advice on how taxes on interest earned are handled.

As for investing later on, a structure that you may want to look into are investment bonds. They're popular for their simplicity. Money smart has more info on these.

As always, not making any personal recommendations, just letting you know those exist.

|improve this answer

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.