Kids (10-17yrs) Saving Acc Paying 5.05% up to $5000 (+3.35% on Bal >5k) with Min Conditions

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linoc66 on 11/06/2014 - 13:50 cua.com.au (136 clicks)
Last edited 11/06/2014 - 16:51 by 1 other user

Hi All

I'm not a financial expert but I'm always looking out for the best deal/s for my family & friends. I just discovered something I wish I'd known about years ago, thought I'd share with all you other caring parents.

For the past ~10yrs I've been using Bankwests "Kids Bonus Saver" account, obviously for my kids future needs, car etc.
Whilst (I believe) they pay the highest interest (currently 5.75%) it has many conditions including only being permitted to start with $1 then a max deposit of $250 per month (max 3k over 12mths) then at the end of 12mths the total funds get transferred back into their linked standard "Children's Savings Account" (which pays 1% <3k) and having to start over with the max $250 per month deposit again.

What this means is even if they have 3k available they'll never be able to take full advantage of the 5.75% over the 12mths, overall it would likely work out similar to any other low interest account. You can check out details here - http://www.bankwest.com.au/personal/savings-term-deposits/sa…

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I just did my usual search on Ratecity to see what's happening, as usual found nothing new, however I then I noticed a check box on the left I'd never seen before which says "Include all products without Go to Site Links", I checked it and suddenly at the top of the list is a bank I've never heard of before called CUA (Credit Union Australia), apparently they've been around for over 50yrs and are the 5th top bank in Aus? says something about marketing hey, however they only have one branch over here in WA.

They not only allow you to straight up deposit and permanently leave (<18yrs) whatever amount you like, up to 5k pays 5.05% from day one (higher than some home loan rates) plus every dollar over 5k receives 3.35%. Plus unlike BW there's no penalties for withdrawals etc, Check out details here - http://www.cua.com.au/personal-banking/savings-and-term-depo…

As said I'm no financial expert, perhaps there's something else I'm not aware of, if anyone knows of a better deal please let us all know, otherwise I hope I've helped out other parents that also weren't aware of this.
Cheers! ;-)

Edit: Another option I just found for all ages to 18yrs paying a little more @5.15%, however must make min $5 per month deposit without withdrawal
Its about a 1/4 down the page - "Kids Bonus Saver Account" http://www.firstoptioncu.com.au/savings-investment-savings-a…

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  cdemarco on 11/06/2014 - 14:30

  Went to sign up my 3 year old, minimum age is 10. :(

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    linoc66 on 11/06/2014 - 14:51

    It is in the title

    Another option I just found for all ages to 18yrs paying a little more @5.15%, however must make min $5 per month deposit without withdrawal
    Its about 1/4 down the page - "Kids Bonus Saver Account" http://www.firstoptioncu.com.au/savings-investment-savings-a…

    The frustrating part to get it started is not being able to do it electronically, have to download forms, fill them in, send them off via snail-mail, all seems a bit old school

    • 

      mskeggs on 11/06/2014 - 15:06

      edit: doh. Learning to read

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  mskeggs on 11/06/2014 - 14:47

  I've banked with CUA all my life. Well, I started with Metropolitan Credit Union before they merged.
  They are reputable and as a non-profit pass benefits on to members.
  This looks like a good deal.

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  syba on 11/06/2014 - 16:04

  +2

  FYI, the income earned is classed as passive income. The first $416 passive income for kids isn't taxed but every dollar over that is taxed at the maximum tax rate. If you have the $5k in the account your child will earn ~$250 interest for the year so is safe. Just making you aware in case you decide to put more money in that you may get taxed more than you would in your own name.

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    linoc66 on 11/06/2014 - 16:19

    Thanks for that, I wasn't aware, like most taxation related issues its very confusing leaving us wondering if we've submitted everything correctly incase the auditors come knocking (perhaps again) one day

    For ATO info on children's accounts
    https://www.ato.gov.au/Individuals/Income-and-deductions/In-…

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      norkle on 13/06/2014 - 15:06

      And if someone has more than $5,000 to go into a savings account, ANZ shares have a Bonus Option Plan where the dividends are reinvested and do NOT count in the current tax years income. Instead the tax is applied on sale of the shares (as a capital gain I believe). Good for kids < 18 who have the $416 income limit. I am not providing tax advice - seek advice that takes into account your own personal situation.