Savings Bonds?
by admin ~ June 15th, 2007 . Filed under: Personal Finance .
wellaem asked:
What is the best way to set up a savings plan for a newborn? This would be a gift for a great nephew. Are government bonds a good way to go, and if so, do I need the baby’s SSN?
Carly Breed
What is the best way to set up a savings plan for a newborn? This would be a gift for a great nephew. Are government bonds a good way to go, and if so, do I need the baby’s SSN?
Carly Breed
June 18th, 2007 at 2:58 pm
You need the baby’s SSN.
I set up a Coverdell Education Savings account at Scottrade.
I also buy e-Series savings bonds at the Treasury dept
You can also set up a UTMA/UGMA account at Scottrade, if the custodian is not you or your husband, the gains are taxed at the baby’s tax rate. although they might have changed that. Ask around.
I prefer Scottrade for most accounts, because they have no fees when done right. But you can set up these types of accounts with almost any investment company or bank.
June 21st, 2007 at 4:04 am
As investments for a new born are for the long term, the best choice would be an index fund tracking the S&P500.
Even better, but more speculative, would be one tracking emerging markets like India, China , Brazil or a basket of them.
Good luck to the baby.