We know that Halloween has barely passed, and you don’t want to think about Christmas yet, but we’d like to offer you a few suggestions to be thinking over. We know that the kids in your life want toys to play with. We’re all in favor of toys, but have you considered also giving a gift that will keep on giving well into the kids’ adulthood? We’re talking about a high yield savings account.
None of need to be told that savings account rates are in the crapper lately. Most passbook savings accounts pay out a paltry 0.5% interest yield or less. But you can open a high yield savings account which will earn considerably better interest if you either:
- Have a large sum of money to deposit all at once.
- Are willing to accept restrictions regarding how often or how much you can withdraw from the savings account.
- Are willing to maintain a minimum balance at all times.
While these restrictions make it difficult for many to open a high yield savings account, they are in fact ideal for gift savings accounts. After all, the reason you open up savings account for a son, daughter, niece, nephew, or grandchild is so that money can be saved for them so that they’ll have it when they really need it: when they’re starting college or a career.
Think about it. You can still buy the kids some toys, but don’t go overboard spending money on toys when you could put money aside for them that will be appreciated much longer. After all, unless the kids are truly exceptional, they’ll only end up playing with the toys’ boxes anyway. And if they are truly exceptional, you’ll really want to make sure you put money away for them because they’re going to need it at that Ivy League college.
After you’ve started the kids’ high yield savings accounts, consider making periodic deposits for them on birthdays, Christmas, and other special occasions. When they’re 18 and ready to begin life on their own, they’ll be glad you had so much foresight.
High yield savings accounts range widely in the rates they offer, so it pays to get on your computer and do a little research before plopping down the first deposit. Most high yield savings accounts pay significantly more than passbook savings accounts, but that isn’t true across the board, so invest the time to make sure you are getting the best possible rate of return based on the amount of money you are depositing.