[kristianp]

We have bank accounts for our kids, currently earning 1.75% because we aren't depositing money every month. If money is deposited it's another 3.3%.

I really need to get around to setting up Vanguard for them. Thanks for the reminder!

[bonesss]

My kids have bank accounts to learn how to manage money, banks, and training: getting used to having money in the bank before, during, and after a trip to the mall. My hope is to let them screw up their finances when they’re little instead of 20-something.

We’ve also setup tax-deferred retirement investment accounts for them. $1 at 20 can 70x or more by retirement. Mostly it’s the mental training though. Being ok “losing” money during a market correction, saving for wealth in parallel with saving to buy, seeing interest and returns over time, and having a long term plan.

[Cider9986]

You need to put them in a custodial brokerage account or whatever allows you to buy ETFs for them (not sure of best tax advantaged account for non-working kids) and buy the s&p or total us market. A bank account is horrible idea when they have a long time horizon meaning they aren't affected by ups and downs of market.

Bank accounts are for 6-8 months of salary for an emergency fund.

You can read this wiki or ask an AI about the strategy.

https://www.bogleheads.org/wiki/Main_Page

[nsvd2]

1.75 is less than the money is losing value from inflation. If that savings is in USD it's quite a bit less than inflation over the past five years.

[samudrijan]

Look into a 529 college savings plan.

[hiddencost]

VTSAX, ASAP.

Inflation is usually estimated at 3% + annually over a long enough time horizon. You're losing money.