Ideas Wanted For Kids Savings

[Wentworth]

I have a young son and want to save or investment a regular amount every month eg 1,000 Baht along with perhaps the odd amount that he may get from relatives. I've looked at the high street bank savings accounts including 3 and 6 month fixed rates - It's hardly worth the petrol or shoe leather to go. This is a long term thing - perhaps 15 years +.

I have thought about investing abroad but it would only be economical if done on say a 6 monthly basis or more. I'm trying to give him the savings habit by doing something every month that is tangible, to encourage him. So, my feeling is that it probably needs to be in Thailand but willing to be persuaded.

I would be grateful for suggestions.

[opalhort]

Have a look at the SCB (Siam Commercial Bank) 36 months Education Bonus account.

We had it in the past which required a deposit of 3,000.-B per month. When the first 3 years were up the interest was slightly better than a normal fixed deposit acc. Now we have the same type of acc but have to pay only 2,000.-B per month.

There are also other benefits tied into this acc.

opalhort

[nakachalet]

opalhort

pls tell, what are some others benefits tied to the acct.

thx

[fletchsmile]

Yes savings rates are pretty poor on bank accounts.

One thing we started at birth for our kids is investment in mutual funds/unit trusts. Now if you can look out 15 years+ as you say, you might consider some investment risk acceptable. Capital is not guaranteed, but returns are likely to be higher. Minimum amounts usually start at around THB 5,000, so if you have THB 1,000 per month in mind, you could put that in the bank each month as a good habit, then buy say every 6 months. These are some of the companies we use: you could buy direct or thru a bank.

http://www.aberdeen-asset.co.th/aam.nsf/th...mp;pricesprices

http://www.ingfunds.co.th/EN/index.asp

http://www.tmbam.com/v1/en/

You mentioned you were considering investment abroad, the above also do Foreign Investment Funds (FIF), so you could invest in say Asia, Europe, World, Emerging markets, Gold etc from the convenience of Thailand. If you go offshore you'll likely get hit for high charges relative the amounts you are investing: 1) to just get your money there 2) for the schemes/vehicles/advisors etc

[opalhort]

opalhort

pls tell, what are some others benefits tied to the acct.

thx

The interest for the last acct was just under 3%pa and no tax on the interest. Also there was some kind of accident insurance.

After the 36 months the acct was moved to a 15 months fixed deposit type with a fixed 3% interest pa (not sure if tax free or not).

The new acct opened this year with monthly deposits of 2K gives about 2% interest pa tax-free (not clear about insurance).

Contact the SCB and ask. My wife looked around and found that they have the best deals as far as banks go.

opalhort.

[aurelius]

similar, from Bangkok Bank..

http://www.bangkokbank.com/Bangkok%20Bank/...es/default.aspx

[hhgz]

"I would be grateful for suggestions."

When he says, "I'm leaving home!", give him $1 for every mile. At the most, you'll pay $10,000, and he'll be out of your hair.

[sokal]

At nominally negative interest rates you are stuck buying silver for the next 5 years at least. Then in 5 years, take the silver to a bullion bank, exchange it for cash and then put the cash in a savings account.

[PattayaParent]

Look at offshore banking too.

Bradford and Bingley International have a Young Saver Account paying 1% at the moment and Royal Bank of Scotland International do a Rainbow Saver Account at 0.50%.

Not much I know but kids accounts offshore are a bit limited in supply.

[sokal]

Look at offshore banking too.

Bradford and Bingley International have a Young Saver Account paying 1% at the moment and Royal Bank of Scotland International do a Rainbow Saver Account at 0.50%.

Not much I know but kids accounts offshore are a bit limited in supply.

F that, buy silver.

[fletchsmile]

Look at offshore banking too.

Bradford and Bingley International have a Young Saver Account paying 1% at the moment and Royal Bank of Scotland International do a Rainbow Saver Account at 0.50%.

Not much I know but kids accounts offshore are a bit limited in supply.

Possibly an option if your money is in a UK jurisdiction to start with. Though hardly seems worth it even then.

But if OP is starting from Thailand, with THB 1k per month, a very hefty part of that would go in bank fees to get the money there, unless he happens to be visiting and deposits by hand... Might as well open an onshore (Thailand) foreign currrency deposit account - less hassle.

[sokal]

Look at offshore banking too.

Bradford and Bingley International have a Young Saver Account paying 1% at the moment and Royal Bank of Scotland International do a Rainbow Saver Account at 0.50%.

Not much I know but kids accounts offshore are a bit limited in supply.

Possibly an option if your money is in a UK jurisdiction to start with. Though hardly seems worth it even then.

But if OP is starting from Thailand, with THB 1k per month, a very hefty part of that would go in bank fees to get the money there, unless he happens to be visiting and deposits by hand... Might as well open an onshore (Thailand) foreign currrency deposit account - less hassle.

If you are not convinced of my plan then put half in some dopey negative interest savings account and put another half in cold hard silver and see who comes out on top.

[fletchsmile]

Look at offshore banking too.

Bradford and Bingley International have a Young Saver Account paying 1% at the moment and Royal Bank of Scotland International do a Rainbow Saver Account at 0.50%.

Not much I know but kids accounts offshore are a bit limited in supply.

Possibly an option if your money is in a UK jurisdiction to start with. Though hardly seems worth it even then.

But if OP is starting from Thailand, with THB 1k per month, a very hefty part of that would go in bank fees to get the money there, unless he happens to be visiting and deposits by hand... Might as well open an onshore (Thailand) foreign currrency deposit account - less hassle.

If you are not convinced of my plan then put half in some dopey negative interest savings account and put another half in cold hard silver and see who comes out on top.

I personally wouldn't choose cash alone, nor would I want a single commodity like silver. I was just trying to add something relevant to a post on cash should someone be interested in that. After all it comes down to personal choice and risk.

My own choices are earlier in the thread, which are done on a regular basis which will hopefully educate the kids across different kinds of investment classes and bring them some good habits as OP mentions. In addition to equity funds with different geographical and sector exposures, fixed income and gold funds, we have also invested in some commodity funds on their behalf - which you'll be happy to know includes an element of silver

Edited November 10, 2009 by fletchsmile

[Wentworth]

Many thanks for all your suggestions.

I just thought that I would let you know that I have decided to go for the Mutual Fund approach - just investigating which provider to go with.

[fletchsmile]

Many thanks for all your suggestions.

I just thought that I would let you know that I have decided to go for the Mutual Fund approach - just investigating which provider to go with.

For onshore mutual funds which you're looking at you've 2 main options:

1) Go direct to the fund management house that runs the investment fund.

2) Go thru a bank.

There is generally no difference in what it costs, and both have their advantages and disadvantages. I have done both in the past, but these days find it easier to deal with one party (bank) rather than go to each fund management house individually. It's then all under the same umbrella and can be in the same place as your bank account. You can then get to know a relationship manager in your preferred bank should you desire.

If going thru a bank, generally Thai banks will push their own related fund managers eg BKK bank push BB funds, Bank of Ayuthaya AJF. On the other hand foreign banks will deal with most fund managers and be more flexible offering a wider range of funds as they are more independent.

At this stage for the amounts involved it is not a critical decision though, and you can always change later.

[hhgz]

I'd suggest using a firm similar to Schwab or Fidelity, and let them assist you with developing a PLAN - not just opening an account. Large firms can assist you with mutual funds - either stock or bond - savings and checking accounts, and insurance-based products. Although both companies are based in the US, both of them have offices in Asia. Having said that, it is imperative that you familiarize yourself with tax issues with the country that your investment advisor is situated. Several TVers have tried to escape taxes in one country, by using an investment firm in another country, only to find out that the taxes in the second country were more burdensome than their home country. I use Schwab - based in the US - and I could not be happier, and, there's a reason for me not to use Schwab in Hong Kong. You may have a different perspective, and I wish you and your kids the best of luck.

[fletchsmile]

I'd suggest using a firm similar to Schwab or Fidelity, and let them assist you with developing a PLAN - not just opening an account. Large firms can assist you with mutual funds - either stock or bond - savings and checking accounts, and insurance-based products. Although both companies are based in the US, both of them have offices in Asia. Having said that, it is imperative that you familiarize yourself with tax issues with the country that your investment advisor is situated. Several TVers have tried to escape taxes in one country, by using an investment firm in another country, only to find out that the taxes in the second country were more burdensome than their home country. I use Schwab - based in the US - and I could not be happier, and, there's a reason for me not to use Schwab in Hong Kong. You may have a different perspective, and I wish you and your kids the best of luck.

Some reasonable ideas hhgz on a generic level - particularly for US citizens. In OP's situation the US approach is probably overcomplicated though.

I believe OP is a UK national married to a Thai with a son who probably is dual nationality. The investment is for his son. For Thai individuals there is no additional capital gains, income tax or inheritance tax on mutual funds. Even if his child has single UK nationality the amounts involved at THB 1,000 or approx GBP20 per month are well below UK tax thresholds, and even then not subject to UK income or capital gains tax as held outside UK as living in Thailand he is no doubt no-resident for tax purposes - so basically no worries on tax at this stage.

Worth considering as hhgs says, about developing a plan. A simple chat to a relationship manager either directly with the mutual fund company or with a bank relationship manager if he goes thru a bank, would help if you explain what you're aims are. A simple global equity fund would be a reasonable core holding to start, or even something regional like an Asian fund. As time goes by he can widen the range of funds, as they build up their investment knowledge. Bear in mind the amounts, and the frequency....

Wentworth,

Again as an example, the first few funds we bought for our kids' funds were:

Aberdeen Global Opportunities Fund (equity fund)

Aberdeen Asia Pacific Equity Fund (equity fund)

ING Thai Equity (equity fund)

TMB Corporate bond (bond fund)

Aberdeen Emerging Growth Fund (equity fund)

Then started adding things like:

UOB Smart Commodities Fund (commodities fund - linked to overseas fund)

TMB Gold fund (gold fund - linked to overseas fund)

Now they have a reasonable spread built up by doing a small amount each month, and choosing one fund each time diversifying. The focus is mainly on equities given a 10year+ time horizon from now.

I'd also add they have returned more than cash to date, even after 2008 falls with 2009 gains, the regular small amounts approach is useful for smoothing timing.

Edited November 11, 2009 by fletchsmile