What is the best way to start child's savings?

Question

I have a 3yr old and I want to save money for him when he gets older... What is the best way to do that? are savings account good and if so from where and is it good interest wise? Are Cd's good? I'm sorry but I don't know that much accept for checking accounts.. If you starting savings for your children can you tell me how?

Thanks I really appreciate it

Answer 1

You are getting 1/5th of 1 percent interest on your account.  Which is more than i am getting on one of mine but it will take you 500 years to get rich at that rate.  You might have to consider an "investment" that can not go down in value.... and everyone wonders what that might be.  You might buy a rental house as his college fund.  Try to pay it off in 15 years.  Otherwise you put your money in US Government Treasury bills which are safe.  treasurydirect.gov.  I buy those. /

Answer 2

Open up a CD under the Uniform Transfers to Minors Act. Any bank will help you. Right now I'd stay pretty short term on the CD (12 months max) because interest rates are going to rise. CDs can be rolled over with a phone call. At the moment I would recommend a CD from Washington Mutual (see link below), but rates change weekly, so you can shop around.

Make sure you have the child's social security number. You will use that for the CD, not your own.