Savings for my baby

[Bettis]

My son turned one recently and after all the money he has received when he was born, for baptism, and for his 1 yr birthday, he has about $1,500.  My wife has it all in a savings account so far but I know the interest is a pittance.  He won't be touching this money until he is at least 17 but more money will be put in as he gets it.

I've mentioned 529s to her but we don't know if he'll want to go to college.  What can we put the money in where there is a guarantee of no loss.  She is worried about investing because he could lose the money.  I've explained that not investing is the same as losing 3% due to inflation but she won't budge on the no risk thing.

I know when I was younger I would get savings bonds each year and at the time, they would get around 4% but I'm guessing they pay very little now, plus the earnings are taxable.

Any ideas?  I just want him to get a nice head start.

[ash7962]

Can you open a taxable investment account with Vanguard or Betterment in both yours and his name?  I'd just stick it all in VTSAX (or non admiral equivalent), and let it grow.  I bet if you called either company they could help you out with tax implications (as in whether your son would theoretically be paying taxes or if you're adding them to your own).  I doubt the dividend income will cause a big increase in taxes for you, and by the time he's withdrawing the gains will (almost) all be long term.  Also, a regular old taxable account means you can withdraw whenever without penalty (other than taxes).

[nvmama]

Following.   

I have 3 kids and have wanted to do more with their money. But I didn't want the 529 plans because I don't if they will go to college.   My oldest whose 8 only has $1500 and the other 2 kids (5 and 3 months) have less.  I've felt guilty about not doing more with their money.  Currently they have it in a savings account at Capital one 360 and because I didn't want to deal with setting them each up with user names and passwords they are just in my name.

I thought about putting them into a taxable vanguard accout once they have more but haven't yet.  Also I wasn't sure if i should just do it in my name or make it a custodial account.

I'm interested in what others are doing.

[Samsam]

following

[HairyUpperLip]

Also in for any good advice.

My daughter is 2 and has around $6,800 in an Ally Savings account.

Not really interested in the 529 since I have no idea if she will go to college or not.

[kwh03001]

If your child does not go to college, you can simply withdraw the contributions without penalty.  You would only have to pay income tax and a 10% penalty on any earnings the account has produced.

Also, vocational programs might be an eligible 529 expense as well.  Going to trade school is often overlooked, but can provide a lucrative career.

[Kaikou]

Does the 529 work for the dual enrollment classes that many take during high school?

That would be one way to make it worthwhile