Buy shares for son
QMy wife and I have been putting money aside for our six-year-old son since he was born. Currently, he has around $13,000 in a savings account that pays around 2.4% interest. This is a standard savings account where we have to deposit $100 a month and make no withdrawals.
As we don’t plan to let our son have this money until he is a least 18, we are looking at long-term investment plans. What do you suggest we do with his savings, keeping in mind that we will continue to deposit $100 a month into an account for him. Should we explore term deposits or managed funds?
Yes, you should. With a 12-year time frame, in my opinion, holding the money in low-interest cash is sub-optimal.
My dad and mum also put aside savings for me. They bought shares, which appreciated enormously by the time I needed the money. We did the same for our kids and got the same result.
So I think you should look at a low-cost share fund or simply buy a few wellknown shares via a low-cost online broker. In the short term, shares are volatile but your son has 12 years or more.