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Opened accounts for the kids

April 2nd, 2015 at 07:31 pm

I took fifteen minutes tonight to open investment accounts for each kid at Vanguard. These are UTMA accounts with myself as custodian. The plan is to fund them with any gifts from relatives that are meant for college, as well as contributions from us so that $500 per year is added for each kid.

I had hoped to open them with $2500 for three-year-old DS1 and $1000 for zero-year-old DS2, but the minimum to open a Vanguard account is $3000, not $1000. So I put in $3000 for DS2 and $4500 for DS1. Since these will be in their names, I want to keep the contributions as fair as possible.

So that's another item off the goals list. I had planned to add $500 to each account on their birthdays (gifts from relatives plus additional from us), but since the opening amounts were higher than I intended, I'll call the goal done for the year.

We plan to put most of our "college savings" in regular investment accounts under our names, since we don't know what the plan will be to pay for college down the line. These will be the only accounts that are in the kids names.

4 Responses to “Opened accounts for the kids”

  1. creditcardfree Says:

    Your post makes me realize my daughter's UTMA account is probably hers now that she's 18. I will have to check. Smile

  2. doingitallwrong Says:

    It probably won't change automatically, you'll need to call or fill out a form. (I've just been through this with a couple of clients; one child was 19, one was 21, and the accounts were never changed until we initiated the process.)

  3. frugalredhead Says:

    I'm planning on doing the same thing, but I was looking at the STAF fund with Vanguard which only has a $1000 minimum to open. DS1 (7 years old) has over $1300 in his account, and DS2 (4 years old) only has around $400. I think I might just combine them until they have enough money for me to split them up again (for example, I'd know that younger DS has 25% of the balance that belongs to him, so when the account has $4K I would move $1K to a separate account for him.)

    Right now their money is in a savings account making 0.75%, so I'd like to put it somewhere better!

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