New account for child?

[Swat]

We just had our first child and was wondering what types of savings accounts you've setup for children. Almost all of the money we give him will go directly into his 529 account that we've already established. However, we've already received a few checks made out to him from family members that have been earmarked for a certain purpose other than college (toy, trip, clothes, etc...). Since the checks are made out to him, my understanding is that I can't just deposit them directly into my personal savings account and then just make the gift purchases on his behalf.

I was thinking of opening up a simple savings account at Ally bank under my son's name with me as custodian to help manage these small family gifts. The total amount will never accumulate to much at this point in his life. However, when I called Ally, they said the only thing that can be opened is as a UGMA account.

Essentially, is this my only option, to open a savings account as a UGMA account to handle family checks/gifts. Are there other options? I'm just unfamiliar with what makes the most sense to setup for him.

[bizniff]

I just deposit those checks into my account and use the gift money as I see fit for my kiddos. The bank's never said anything about the check being in their name.

[Gin1984]

As a minor, you as the legal guardian have the right to their money.  I don't see why a bank would complain, but if they do, speak to a manager.

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[nessness]

To deposit the check into your account, just endorse it with your own name, then write "parent of minor" underneath.

[protostache]

To deposit the check into your account, just endorse it with your own name, then write "parent of minor" underneath.

This is what my bank wants as well but I would check in person before endorsing it.

[kasey00]

I'm taking a look at several options right now myself, but I set up a savings account in a local bank for those gift checks from family at Christmas, birthdays, etc. Partly so that she can experience physically walking into the bank with her savings passport book, and watch them not only deposit the money, but watch it grow. It doesn't grow exponentially, but it was partly for just plain (hopefully!) planting the seeds of desire to save and nurturing it with experience she can relate to. Now I'm starting to look at some other options where I can start her in investing, and make some of those seeds grow a little faster :)

[NoStacheOhio]

This is what we have for our son: https://www.capitalone.com/savings-accounts/kids-savings-account/?isBus=false&int=false

[moof]

Ours is 4, and at the very beginning stages of earning and understanding money.  Gift money goes into a mason jar along with quarters he has earned for being helpful and doing chores, and mostly he uses it to buy Legos.  He has too many Lego's, but that is what likes.

Money earmarked for college contributions goes into his 529, as we end up getting a state tax deduction out of it.  So far he has more in his account than my wife and I got as college help combined.

Basically we don't sweat it.  If he gets a gift card for $25 of Baskin Robbins, we treat the family and explain it was a gift from grandpa.  At a young age you can't have separate finances.

[kasey00]

I agree with the restaurant gift cards - if my daughter or I get one, we both go out to eat together. If she gets shopping gift cards (and that reminds me...I owe her a shopping day!) she gets to go shopping with her cards for things for her. I do keep those separate (even though mine usually go into something for the house that ends up benefiting both of us anyway!)

[dannymurphy]

My wife and I decided on opening a custodial brokerage account for our son, which will allow more freedom later on, but fewer tax benefits. As long as he's earning less than $1000/year in it, it's not getting taxed. It's a little different than the 529, in that is HIS account, we just manage it. With the 529 account, it would be the PARENT'S account with the child as beneficiary.
We landed on this because, while I hope he decides to pursue higher education, the custodial account would support him to pursue other endeavors as well.

[protostache]

We're going with a two pronged approach right now for my daughter. First, she has a 529 where we plan to stash Christmas/birthday money until she's old enough to care about spending it (she's 6 months old). Any gifts specifically earmarked as "college" go here. Second, we opened a separate taxable brokerage account in our name and earmarked it for her. This is where we'll be saving for her future. When we get to the point where the taxes from this account are significant we'll probably start transitioning chunks of it into a UTMA account.