Personal Finance

Best place to park kid's money?

  • Last Updated:
  • Feb 26th, 2017 2:11 pm
[OP]
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Jul 15, 2003
3345 posts
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Ontario, Canada

Best place to park kid's money?

My 6 year old is getting $2k from great grandma. Where is the best zero risk and less than 1year locked place to park this for a while?

From searching this forum i found eqbank.ca which seems to have a 2% savings account. I can't seem to find a GIC anywhere that is higher than that. There are a couple 5year gics at 2.25% but i want to keep this liquid.

So is eqbank the best idea right now?
28 replies
Deal Expert
Aug 22, 2011
35631 posts
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Center of Universe
HISA is your best bet, since it's only $2000 and you're not looking for long term growth.
Deal Expert
Feb 29, 2008
26721 posts
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Montreal
I would use an o line bank that pays regular or monthly interest. That way your child can log in and visibly see then interest accumulate immediately. The learning experience is far more valuable than the actual return.
Newbie
Dec 31, 2013
37 posts
19 upvotes
Mississauga
Just confirm if it is not some promotion and after 2-3 month it drops to a small interest rate.

Currently Tangerine have 3.25% interest on up to $500,000 in new deposits, but it is only until Mar 31, 2017
Alex Shapovalov
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Deal Expert
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Jul 30, 2007
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Toronto
Buy some bank shares and dividends earned can be reinvested .. Overtime, it surely will appreciate
Deal Expert
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Mar 18, 2005
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Niagara Falls
Do you have an RESP for the child? If not, that would gain you 20% right away, but has obvious limitations.
[OP]
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Jul 15, 2003
3345 posts
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Ontario, Canada
Thanks for suggestions.

Already doing $2500/year in RESP to max out the 20% grant.

Yes eqbank seems to be 2% all the time and not a promotion.
https://www.eqbank.ca/personal-banking/features-rates

Don't want to make this complicated. Just looking to see if there is a HISA with better rate.
Deal Expert
Oct 6, 2005
16599 posts
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Kevinck wrote: My 6 year old is getting $2k from great grandma. Where is the best zero risk and less than 1year locked place to park this for a while?
Zero risk would be Tangerine or similar.

But I would buy an index fund or ETF; take some risk, it's only $2,000 plus you have a lot of years to average out returns.
booblehead wrote: Buy some bank shares and dividends earned can be reinvested .. Overtime, it surely will appreciate
Or a Bank ETF.
Sr. Member
Oct 11, 2010
977 posts
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Charlottetown
RESP would be the best if you aren't all ready maxing out grants for one
Sr. Member
Jan 14, 2010
666 posts
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Central Ontario
OP sounds like s/he wants risk-free HISA, just looking for best interest. "Back in my day" parents would have invested in CSBs (lol).
The issue with investing for growth (ie ETFs) is that the income will be attributed to parents until child is 18. I haven't found a way for even early teenagers to invest in the 'market' on their own. ???
Deal Fanatic
Jan 18, 2003
5866 posts
1638 upvotes
Mississauga
AlexS748 wrote: Just confirm if it is not some promotion and after 2-3 month it drops to a small interest rate.

Currently Tangerine have 3.25% interest on up to $500,000 in new deposits, but it is only until Mar 31, 2017
the tangerine promo interest rate isn't for everyone... it is targeted...

op, based on your needs, eq bank is your best choice.
Deal Addict
Dec 22, 2008
2170 posts
969 upvotes
Victoria
EQ for the consistent 2%, plus the child can watch the money grow. Great learning experience.

Why some people above recommended Tangerine is beyond me...their promos are only good for a very short period of time unless you want ot constantly be withdrawing and putting it back.
Deal Addict
Apr 21, 2014
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Alberta
cocodc wrote: OP sounds like s/he wants risk-free HISA, just looking for best interest. "Back in my day" parents would have invested in CSBs (lol).
The issue with investing for growth (ie ETFs) is that the income will be attributed to parents until child is 18. I haven't found a way for even early teenagers to invest in the 'market' on their own. ???
I opened a trust for each of the kids and that is where their monetary gifts from grandparents and family goes. Doesn't get attributed to me. They are invested in mutual funds.
Deal Guru
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Aug 8, 2012
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BC
Kevinck wrote: Thanks for suggestions.

Already doing $2500/year in RESP to max out the 20% grant.

Yes eqbank seems to be 2% all the time and not a promotion.
https://www.eqbank.ca/personal-banking/features-rates

Don't want to make this complicated. Just looking to see if there is a HISA with better rate.
Put it into the RESP anyways. It will grow tax free.
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Sr. Member
Aug 7, 2014
563 posts
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cocodc wrote:
The issue with investing for growth (ie ETFs) is that the income will be attributed to parents until child is 18. . ???
The income attribution rules apply to funds transfers from the child's parents and not applicable to gifts from grandparents or other relatives.
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Jul 29, 2013
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psudolam wrote: The income attribution rules apply to funds transfers from the child's parents and not applicable to gifts from grandparents or other relatives.
I do not think this is true. The earnings from the gift are attributed back to the adult who gave it to the child. Only capital gains can be used by the child if they sell after age 18. If not grandma and friends ie. non parents could give maga bucks as a tax shelter.
Sr. Member
Aug 7, 2014
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profile wrote: I do not think this is true. The earnings from the gift are attributed back to the adult who gave it to the child. Only capital gains can be used by the child if they sell after age 18. If not grandma and friends ie. non parents could give maga bucks as a tax shelter.
The attributions rules are in section 74.1 in the Canadian Income Tax Act and they apply to transfers of property (including funds & real properties) between spouses, and between parents and their children. That is, they do not apply outside the immediate family unit. That is, your friends can give their after tax dollars to you or to your child without any tax implications. I dont see that as a tax shelter on their part, as it is a gift without expectation of returns.
Last edited by psudolam on Feb 23rd, 2017 11:58 pm, edited 1 time in total.
[OP]
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Jul 15, 2003
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Ontario, Canada
Should i open the EQBank account in my 6 year old son's name?
Deal Fanatic
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Nov 19, 2004
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Cambridge, ON
Kevinck wrote: Should i open the EQBank account in my 6 year old son's name?
I think you have to be 18+ to open an account. You can open it in your name though.
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Apr 23, 2009
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+++1
booblehead wrote: Buy some bank shares and dividends earned can be reinvested .. Overtime, it surely will appreciate

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