Savings advice
Hi, can anyone share their experience?
We have just transferred our savings from UK and would like to put money away for the kids, I am thinking around $10000 However I can't find any accounts that make any interest! I really can't get my head around how savings work over here, is it more usual to make investments in stock than have a simple savings / bond account? Does anyone know what the nearest equivalents are to an ISA or a bond, I was hoping to make a few percent interest at least. Just wondered if anyone could share any advice before I visit a financial adviser and pay a lot in fees??? Thanks, Alison |
Re: Savings advice
Originally Posted by alihouse
(Post 10270186)
However I can't find any accounts that make any interest!
Ian |
Re: Savings advice
CD...but the rates are shit these days.
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Re: Savings advice
If you want to save long term for the kids as in college fund, look into what is known as a 529. It's a type of investment account like a 401k. Better return than savings accounts.
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Re: Savings advice
Originally Posted by sir_eccles
(Post 10270403)
If you want to save long term for the kids as in college fund, look into what is known as a 529. It's a type of investment account like a 401k. Better return than savings accounts.
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Re: Savings advice
Originally Posted by sir_eccles
(Post 10270403)
If you want to save long term for the kids as in college fund, look into what is known as a 529. It's a type of investment account like a 401k. Better return than savings accounts.
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Re: Savings advice
Originally Posted by Bob
(Post 10270432)
Still better to save for one's retirement as you'll be retired longer than they're in college and they'd be eligible for more scholarships/grants/loans if they didn't have college funds :/
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Re: Savings advice
You won't find the same guaranteed interest rate accounts in the US that you get in the UK. CDs are the closest equivalent to UK savings bonds, but the rates are far lower. There also is 't anything like and ISA. The closest thing is a ROTH IRA, but that is for retirement savings and there are restrictions on withdrawals before 59.5.
Your best bet is to open an account with a low cost firm like Vanguard or Fidelity and invest in a mix of equity and bond index funds. |
Re: Savings advice
Originally Posted by nun
(Post 10271015)
The closest thing is a ROTH IRA, but that is for retirement savings and there are restrictions on withdrawals before 59.5.
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Re: Savings advice
Originally Posted by fatbrit
(Post 10271059)
It's more multi-purpose since you can always withdraw the capital without penalty.
For now I think the best way for the OP to proceed is to read the wiki over at http://www.bogleheads.org/wiki/Main_Page and open a regular investment account with Vanguard. |
Re: Savings advice
x2 on the Vanguard account. I have a 401k, IRA and a general savings account (for everything I can't put in tax free) with them. There are some good dependable mutual funds in there with low fees. My savings are mostly in: the Wellington fund (60/40 stocks/bonds), Wellesley (dividend stocks and bonds) and the Total bond market index fund. These three came through the past decade pretty well considering all the shit we've been through.
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Re: Savings advice
I have invested in 529 plans for my kids and have so far been happy with the returns and the tax advantages. I would recommend trying to avoid or minimize your dependence on parent/student loans to pay for college. One version of the 529 plan allows you to lock in at today's tuition rates. This can be a deal as tuition increases usually outpace inflation. Whether a 529 plan (or any other investment) is right for you, I cannot say as I don't know your financial situation and, even if I did, I'm not a financial expert. Consider consulting with a financial adviser.
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