Online banks for child savings acct

[3boymthr]

Are there any good online banks for a small savings account for a child? I want to set aside some money for each child but not a lot ($10/wk) and not money that they can access. I have a couple of future expenses that I know are coming up for each child for which I want to save. Our local banks send statements every month with the child's name and they can access the accounts any time they want as long as they have the statement in hand.

ETA - I want the accounts in the child's name as I have one going to college next year and if the money is in my name then I have to declare it on the FAFSA but if it's in their name I don't.

 

[sksjasams]

I set up an an account with the former ING Direct, which is now Capital One 360. It is an online bank. It was very easy to set up. I linked it to my brick and morter credit union account and have an auto transfer set-up for $25 every payday.

One thing I like is that there is a delay of two business days if you want to transfer money back. That way you have time to think about whether or not you really want/need to withdraw.

It is set up in my name, and then I nicknamed the account my son's name. It is actually more benficial to have the money in the parent's name rather than the student's name for the purposes of the FAFSA. The FAFSA will consider a much smaller percentage of the parent's assets, as opposed to the student's assets.

 

[ashleyasiegel]

I also use Capital One 360...there are no minimums and you can have as many accounts as you would like. For instance I have my main savings, vacation fund, house fund, and an account for my bills that are paid every 6 months etc. but I set the money aside monthly. I also have one of their Kids savings accounts for each of my daughters.

I have been using them since 2009 and have been very happy

 

[clh2]

I set up an an account with the former ING Direct, which is now Capital One 360. It is an online bank. It was very easy to set up. I linked it to my brick and morter credit union account and have an auto transfer set-up for $25 every payday.

One thing I like is that there is a delay of two business days if you want to transfer money back. That way you have time to think about whether or not you really want/need to withdraw.

It is set up in my name, and then I nicknamed the account my son's name. It is actually more benficial to have the money in the parent's name rather than the student's name for the purposes of the FAFSA. The FAFSA will consider a much smaller percentage of the parent's assets, as opposed to the student's assets.

I agree with the FAFSA comments.

 

[buzz2400]

I also use and like chase 360 formerally ing direct. I have also opened an account with ally but don't like it. I really do love chase which I still call ing direct.

 

[supersnoop]

ETA - I want the accounts in the child's name as I have one going to college next year and if the money is in my name then I have to declare it on the FAFSA but if it's in their name I don't.

Keep in mind, if the money is in their names, then it's their money. As trustee, you can control their access to the money until they turn 18, but then they get full control. You can spend their money on their extraordinary expenses, but not normal expenses associated with raising a child.

 

[Sadie22]

Unless something has changed in the past few years, the student's money must be declared on the FAFSA.

 

[supersnoop]

Unless something has changed in the past few years, the student's money must be declared on the FAFSA.

I think the idea was to put the money in her younger children's names. It won't be a parental asset then. Another idea is, if the children have any earned income, you can contribute that much to an IRA in their name. Retirement assets aren't included on the FAFSA, either.

 

[DisneyBill]

I also use and like chase 360 formerally ing direct. I have also opened an account with ally but don't like it. I really do love chase which I still call ing direct.

Maybe you love Chase too much? Because it is CapitalOne that acquired the old ING U.S. banking business. Not Chase.

 

[3boymthr]

I think the idea was to put the money in her younger children's names. It won't be a parental asset then. Another idea is, if the children have any earned income, you can contribute that much to an IRA in their name. Retirement assets aren't included on the FAFSA, either.

Yes, exactly. The money is for my younger children. They both need to have some dental work that won't be covered by my dental insurance and I need to put away money for each for driver's ed - which is VERY expensive here. Neither child has earned income.

I don't want the money to show up in my assets for purposes of the FAFSA as I need this money for them specifically and I don't want the money to effect financial aid received by my oldest child. All three of my kids have 529s and Uplan funds with significant deposits so they won't get much in financial aid as it is.

 

[supersnoop]

Yes, exactly. The money is for my younger children. They both need to have some dental work that won't be covered by my dental insurance and I need to put away money for each for driver's ed - which is VERY expensive here. Neither child has earned income. I don't want the money to show up in my assets for purposes of the FAFSA as I need this money for them specifically and I don't want the money to effect financial aid received by my oldest child. All three of my kids have 529s and Uplan funds with significant deposits so they won't get much in financial aid as it is.

While I'm sure many UTMA custodians withdraw funds for those purposes every day, I don't think they are legitimate. Laws vary by state, but generally, they restrict the use of funds for purposes that fall within the normal duty you hold as a parent. If you'd pay the expense if the child's account didn't exist, then it isn't really allowable.

Now, the risk is minimal. The child could sue you for breaching your fiduciary duty as custodian. A judge could order you to reimburse all funds with interest along with court costs and attorney fees. What's the chance of a child becoming upset and knowing he can sue? Probably very little. What would be the repercussions of that? Huge. There's just too much at risk for me to even consider using my daughter's account for those types of expenses.

 

[ruadisneyfan2]

I set up an an account with the former ING Direct, which is now Capital One 360. It is an online bank. It was very easy to set up. I linked it to my brick and morter credit union account and have an auto transfer set-up for $25 every payday.

One thing I like is that there is a delay of two business days if you want to transfer money back. That way you have time to think about whether or not you really want/need to withdraw.

It is set up in my name, and then I nicknamed the account my son's name. It is actually more benficial to have the money in the parent's name rather than the student's name for the purposes of the FAFSA. The FAFSA will consider a much smaller percentage of the parent's assets, as opposed to the student's assets.

Another vote here for ING/Capital One 360! I just set one up for ds17. They have a kids savings and kids checking with a debit card. Kids have their own log in but I can see their transactions on my log in too. IIRC there are limited # of transfers they can make from savings to checking per month. The checking earns very low interest but the savings is .75% which is huge compared to our lame TD Bank which offers .05%.
He's happy with it and can buy things here & there on Amazon without having to have me order it and try to find smaller bills or change & whatnot to pay me for the purchase. He keeps very little in checking because I worry about fraud & using debit cards for purchases (in stores & online.)

 

[DisneyBill]

While I'm sure many UTMA custodians withdraw funds for those purposes every day, I don't think they are legitimate. Laws vary by state, but generally, they restrict the use of funds for purposes that fall within the normal duty you hold as a parent. If you'd pay the expense if the child's account didn't exist, then it isn't really allowable.

No, actually the law says: “A custodian may deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to (i) the duty or ability of the custodian personally or of any other person to support the minor, or (ii) any other income or property of the minor which may be applicable or available for that purpose.”

 

[ruadisneyfan2]

Yes, exactly. The money is for my younger children. They both need to have some dental work that won't be covered by my dental insurance and I need to put away money for each for driver's ed - which is VERY expensive here. Neither child has earned income.

I don't want the money to show up in my assets for purposes of the FAFSA as I need this money for them specifically and I don't want the money to effect financial aid received by my oldest child. All three of my kids have 529s and Uplan funds with significant deposits so they won't get much in financial aid as it is.

Do you have a Flexible Spending Account? It would qualify as an expense there.

 

[3boymthr]

Do you have a Flexible Spending Account? It would qualify as an expense there.

No, I wish I did. Both DH and I work for small companies, about 20 employees at each and I work part time. I feel lucky that we have medical and dental and retirement plans available thru both companies - especially since I only work part time. The dental plans we have available are good ones but neither offers ortho and youngest DS is going to need braces I'm holding off on this for another year or so because his front teeth are just coming in (but that's another story). I know most orthos offer a payment plan before you get started but I want to have a chunk to put down.

 

[ruadisneyfan2]

No, I wish I did. Both DH and I work for small companies, about 20 employees at each and I work part time. I feel lucky that we have medical and dental and retirement plans available thru both companies - especially since I only work part time. The dental plans we have available are good ones but neither offers ortho and youngest DS is going to need braces I'm holding off on this for another year or so because his front teeth are just coming in (but that's another story). I know most orthos offer a payment plan before you get started but I want to have a chunk to put down.

Yes, our ortho does offer that and it's interest free but still had to put around $1200 down. Our office was very flexible about that. Also very flexible on the start date.

 

[buzz2400]

Maybe you love Chase too much? Because it is CapitalOne that acquired the old ING U.S. banking business. Not Chase.

oops... you are so correct. I was paying my chase bill at the same time that I was posting this. So much for multi tasking.

 

[havaneselover]

Capital one 360 is great. Both my children (10 and 9) have savings accounts and an account linked to a debit card. I transfer their allowances from my account.

 

[supersnoop]

No, actually the law says: “A custodian may deliver or pay to the minor or expend for the minor's benefit so much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to (i) the duty or ability of the custodian personally or of any other person to support the minor, or (ii) any other income or property of the minor which may be applicable or available for that purpose.”

Like I said, it can vary by state. In Texas, the law says, "A delivery, payment, or expenditure under this section is in addition to, not in substitution for, and does not affect any obligation of a person to support the minor"