I have a 17 month old son and I put money away for him every month. He has $1300 in a savings account (I know I need to do a little better) but it is just sitting there earning nothing. I have his account at a credit union and I want to open him a CD. Is now a good time to do that? Is a CD the best choice? I don't know ANYTHING about this stuff but I need to act now while his money could be growing. Thanks for your advice. I need to do this asap!
Look for a high interest bearing savings or checking account that doesnt require use of a card to get paid interest. A CD would be a good option as well as it freezes the funds (for the most part) for the specified time frame, just make sure that the CD offers a decent return. Inflation will be very high so ideally it would be best to find something that pays more then the standard inflation rate of 3.5%.
savings accts pay nothing
Bank CD's not much more
- mutual funds will get you a lot better return long term - especially if you are saving for college - annual tuition increases are at least 2-4 times more than what any bank CD pays
How about an ESA (Educational savings account)
It grows tax free and can only be used for college.