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High Interest Kids Saving Account

In Singapore, we have CDA savings account for new born with dollar for dollar matching from the government. In addition, for those with household income <S$4500, you just need to save S$50 and OCBC will contribute one time S$100 and subsequently Singapore government will match another S$150 into the CDA account. As a result, you have S$300 in the account with only S$50 out of pocket and this S$50 can be a portion of baby bonus (let's say $6K). Hmm..., these sound not bad after all! Nonetheless, the drawback is, the interest earned for this account is pretty low which is about 0.8% a year. Therefore, I don't think it's wise to deposit the full lump sum of baby bonus into CDA account at one go, just the sufficient amount to be spent on doctor visit, immunization, etc.

Lately, I found out that BankWest (one of the bank in Australia) is paying 5.75% variable interest for Kids Saving Account. This is a monthly savings account whereby you can choose to deposit A$25 to A$250 on a monthly basis to earn the interest. The good news is foreigner is eligible to open the account and enjoy the same interest rate. Personally, I will think that one might need to find out more about the Australia Taxation details before making any decision.

 Alternatively, saving the balance of baby bonus in OCBC 360 Account to earn interest is not a bad idea though the interest of 3.05% per year might not be considered high to certain people but at least, it's safe and can be easily withdrawn when needed.


 Cheers ! ~~

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Comments

  1. Lizardo17 January 2015 at 14:30

    With A$, have to worry about forex fluctuations. If S$ strengthens, you might find that you're losing money. Unless you're planning to be in Oz land for a while.

    ReplyDelete

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