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There are a lot of ways to invest for your future. Do you
want to learn how to save and watch your money grow? Do you want to plan for your education today to make it easier to
succeed tomorrow?Do you want to take
some of your savings and invest in growing companies to learn about the stock
market?Or would you like to invest in
America and watch your money grow through U.S. Savings Bonds for Kids?
No matter how young you start, the key to saving and
investing is knowing what you want your money to do for you.The more you learn, the closer you will get
to your goals.There are many special
accounts and investments designed just for kids, offering many ways to save,
invest, and plan for your education.
SAVINGS AND INVESTMENT PROGRAMS FOR CHILDREN
- Youth Savings Accounts
Many financial institutions offer special youth accounts for children to begin
saving.Often these accounts require no
minimum balance and charge no fees.So
even if you only have a few dollars to start with, or can only add a little bit
every week or month, you can still get started on the savings habit – and watch
your money grow.
PROJECT:Check around your community for banks and
financial institutions that offer youth accounts or participate in a school
savings program.Your parents can
help.Be sure to ask about minimum
balance requirements and any fees that may be charged to your account.If your school does not have a school
savings program, ask your teacher or parents to learn about the school savings
program at www.saveforamerica.org.It’s a great way to jumpstart the savings
habit.
- U.S. Savings Bond for Kids
U.S. Savings Bonds are a great way to invest in America…and a great way to earn high
interest on your savings. For as little as $25, kids can buy a U.S. Series EE
Savings Bond and see their money double to $50 over the years.And U.S. Savings Bonds offer a special
advantage to children saving for education.
If the money you earn is used for your college tuition, the earned
interest is tax-free, with some restrictions.
PROJECT:Check out http://www.publicdebt.treas.gov/sav/savkids.htm
for more information on U.S. Savings Bonds.
Why are U.S. Savings Bonds for Kids considered a very safe way to save
for the future?How does buying a
Savings Bond help our country? Compare the interest rate you earn with bonds to
the interest rate you can earn from a savings account.
Your parents
and teachers may be interested in holding a U.S. Savings Bonds for Kids event
at your school.You can learn more at www.saveforamerica.org and
www.savingsbonds.org.
- 401Kidz Stock Program
Once you’ve
started the savings habit, you can look at putting some of your money to work
for you in different kinds of investments. One of the most exciting and
educational ways to invest is to invest in America’s companies through the
401Kidz Fractional Stock Program.Now
kids can invest in real stock in real companies – without investing thousands
of dollars.At 401Kidz, children and
their parents can buy fractional shares of stock online.If you’re interested in computers and don’t
have enough money to buy an entire share of Microsoft, you can buy part of a
share or $20 of Microsoft.If you know
about a popular new game, consider buying $35 of Mattel.Soft drinks? You can buy $10 of Coca-Cola. The important thing is not the
number of shares you buy, but that you’re investing for your future.
Plan carefully before investing in stocks.
The advantage of investing in the stock market is that your investment
can grow very quickly. But always keep
in mind: stocks may go up…and they may go down. You’re betting that the company
you’re investing in will be in a stronger position in the future. It is
important that you research a company before investing. Stocks are not insured,
and they are considered a higher risk investment than savings accounts, bonds
and other investments. Remember, investing in stock rounds out your entire
savings portfolio that should begin with a savings account, bonds or other low
risk investments.
PROJECT:Before you
invest in stocks, make it a smart purchase.
Learn as much as you can about a company and the stock market before you
buy.You’ll see that the value of a
stock goes up and down depending on information about the company and changes
in the market.www.401Kidz.com has a lot of information
about making smart stock trading decisions and the 401Kidz fractional stock
program.
SAVINGS AND INVESTMENT PROGRAMS FOR CHILDREN AND PARENTS
Many children and their parents get in the savings habit
together…especially when the goal is investing for the best education
possible.There are many special
programs that help children and parents team up to save for the future.If you and your parents are saving together,
talk to them about these special opportunities.
- Education IRA (Individual Retirement Account)
Every year your parents can contribute up to $500 to an
Educational IRA to help fund your college education. Because these contributions can be made throughout the year, your
parents can help save as you save.And
although no tax deduction is allowed for the contribution, the funds from your
IRA can be withdrawn free of tax and penalties if used to pay for higher
education at qualified colleges and institutions. This makes a big difference
when you decide to go to college. There are many types of IRAs, and some
involve higher degrees of risk than others.
Your parents can ask their financial institution or broker if they offer
Education IRAs.
- State Treasurers Education Program/Credits
Many states offer savings or credit programs to help parents
and children save for higher education.
Families make monthly payments into an account, or purchase credits that
can be considered “pre-payment” for tuition at many of your state’s colleges
and higher education institutions.Each
state Education Program has different rules and regulations.Ask your parents to check with your state
treasury department if there is a plan available that’s right for you.
- Uniform Gift to Minors Account (UMGA)
Parents can give their children gifts of up to $10,000 per
year through deposits into a UMGA account, without paying taxes on the
gift.As the investment grows, the
income from the account is paid at the child’s tax rate, not the parents, so
more of the money stays in the account.
The rules and regulations for UMGA accounts are different based on the
age of the child. Your parents should check with financial institutions in your
community about how UGMAs can help your family invest together.
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