Baby savings

[TexasRanger]

I have been looking at opening a savings account for the kid so we can set aside money so she will have a lump sum in about 15 years or so.

The impression I get is that if you do it with regular monthly deposits you have to open a new account every 2 years, is this normal?

Cheers.

[fletchsmile]

Doesn't sound normal to me. If you're looking at cash savings accounts then something like an e-saver account/ online only may be useful. Generally pay bit better rates and you can add whenever you feel like it.

With a 15 year time horizon I would (and do) look at equity based investments for our 2 kids, using Aberdeen, ING and KTAM among others, bought thru the bank. If you're worried about capital fluctuations towards the end of the time. you could always switch into cash after 10 years or so.

Cheers

Fletch

[aurelius]

The type of account you are describing is a monthly saving plan which can be opened for 2, 3 or 5 year terms. Make a monthly deposit of a fixed amount into this account and you'll get 'better than saving act' rates of interest, us a waiver on withholding tax. If you just want a simple saving discipline and can be quite sure to make the monthly deposit, then thus is a good reliable option. If you use Bangkok bank, then the monthly deposits can be transferred online via internet banking. You can open the acct in your own name and just label it with your kids name in iBanking. The thai name for this acct type is Sinmattaya fixed account. Search for it online. One account per person only. The 5 year term has the best rates in general.

[TexasRanger]

Thanks for the information, I am very wary of equity based stuff, probably due to lack of knowledge on my part, however the Bangkok bank fixed deposits seem like they might be a good idea, thanks again.

[Pib]

Here's the Bangkok Bank webpage regarding their Sinmathaya Subthawee Kids Account. Although it talks monthly deposits for two years, it does show interest rates up to 5 years. So I expect that means for the first two years you need to make the required minimum amount of deposit and then you can stop monthly deposits and let the money just continue to grow interest until the account matures in 2, 3, 4, or 5 yrs and then you would probably want to roll it over into another fixed account/start another Kids Account to get the best interest being offered at the time.

Although I'm not a kid anymore, I have a Bangkok Bank fixed savings account...currently in a 7 month fixed account...but have been in others such as 5 months and 11 months....all depends on what the best interest rate of the time is. Come Sep when my current 7 month fixed account matures I'll want to roll it over into another fixed account to get the highest interest; otherwise it just starts earning 3 month fixed account interest (which is still better than a standard savings account).

[fletchsmile]

Don't forget to check out the terms and conditions for if you miss payments on the Sinmataya, eg interest rate falls to under 2% if you miss 5 or more. Sounds like someone would also want a STO to avoid the admin of having to do deposits manually each month.

On fixed rate term deposits, the only one listed by BKK bank offered at the moment that beats SCBT's e-saver - (2.8%) is a 15 month fixed deposit (3%), all others, including 24m and 36m are all lower. E-Saver is useful as you can access the money/ withdraw any time, and switch to a better account any time - only restriction being you have to do online as no passbook/ATM.

Fletch

[Issangeorge]

You might want to buy a life insurance policy, where you are insured if you die, and after a certain period of time the policy is paid off and you get the money. It's not the best savings plan, but does supply your family with some life insurance protection and in 10 to 20 years you will get a lump sum.

Sent from my i-mobile IQ 6 using Thaivisa Connect Thailand mobile app

[54321]

May I suggest you have second thoughts re: equity based.

People often say the like "safe" investments so put the money in the bank. Yes equities can be risky, however so can bank deposits when rates are so low and inflation so high. The only thing safe about bank deposits is the money will always (all being well) be available, it may however be able to buy a lot less than it once could.

Most advisers would make two suggestions

part cash and part equity

OR

All equity, which should be reviewed aprox. 5 years before the funds are required

Good luck

Thanks for the information, I am very wary of equity based stuff, probably due to lack of knowledge on my part, however the Bangkok bank fixed deposits seem like they might be a good idea, thanks again.

[cocopops]

Thanks for the information, I am very wary of equity based stuff, probably due to lack of knowledge on my part, however the Bangkok bank fixed deposits seem like they might be a good idea, thanks again.

If you really do follow through with the plan for 15 years, it is much more likely than not that avoiding equities will cost your kid money.

Say the savings plan averages 3% pa, a global market index fund 8% and you contribute the same nominal amount each month for 15 years. Your son or daughter ends up with a bit over 50% more money if you take the equities.

Edited August 1, 2013 by cocopops

[aurelius]

So I expect that means for the first two years you need to make the required minimum amount of deposit and then you can stop monthly deposits and let the money just continue to grow interest until the account matures in 2, 3, 4, or 5 yrs and then you would probably want to roll it over into another fixed account/start another Kids Account to get the best interest being offered at the time.

No, in fact deposits are required every month of the full term of each account.

It could be that only the shorter maturity products are being promoted now days; however rates for the longer term accts still have to be quoted as customers are still operating them even if new accts are not being supported.

[TexasRanger]

Thanks for the info. Life insurance is covered already and I have heard bad things about some of these insurances not paying out.