Best type of account for son

[SarahFair]

My son just graduated high school. We gave him $1000 for a graduation gift, BUT it comes with restrictions..
It has to go into some type of account where it can grow, and instead of charging him rent, we are going to have him put 20% of every paycheck into that account so he has a little nest egg for when he decides to leave the house (he is thinking about 5 years) or for whatever he deems it necessary for at that point (long term savings, retirement, future investment funds, etc).

Currently he has no plans to attend college/trade school as he doesn't know what he wants to do yet and doesnt want to waste money taking classes he doesn't need, so no money is needed for school (as of yet, if ever).

He also does not turn 18 for a few more months.

What would be the best type of account for him to see the biggest return on?

 

[Cool Hand Luke]

Look at a Synchrony Money market, high yield savings or CD. Better than 0.01% in most savings accounts. Most are over 4% with no minimum. Even have a 6 month CD at 4.87%. I have several CD's and a savings account with them right now. All done online and very simple to open.

 

[NE GA Pappy]

any bank or credit union isn't paying much right now. I like local credit unions because they tend to pay a bit more than banks, and if he ever needs to borrow money, the rates are a bit less than banks.

If you have a First Franklin Finance near you, they have 6 month certificates that pay pretty well, but they are not insured by the FDIC. They have been around for a long, long time and seem to be pretty solid. I have some money with them

 

[menhadenman]

Bank Ozk has some great options for interest bearing accounts and CDs.

 

[Cool Hand Luke]

Good link recommended by Clark Howard

Bankrate: Guiding you through life's financial journey

Use Bankrate.com's free tools, expert analysis, and award-winning content to make smarter financial decisions. Explore personal finance topics including credit cards, investments, identity protection, autos, retirement, credit reports, and so much more.

www.bankrate.com

 

[Toliver]

Savings accounts are safe but yield next to nothing. $1,000 might be a good little start on something like Robinhood to let him start investing. More risk but with the right stock he will make more. And being young he can certainly sit back and watch the market ebb and flow and just let the money do its thing. Just a thought.

 

[pjciii]

Investing it for him doesn't give him to research, follow and then suggest a plan for investment. He will need to know these things in a few years. Also if he has children he needs to do that for them and contribute monthly.

Just my 2 cents

 

[Toliver]

Investing it for him doesn't give him to research, follow and then suggest a plan for investment. He will need to know these things in a few years. Also if he has children he needs to do that for them and contribute monthly.

Just my 2 cents

I agree. If I had it to do over, I would have given my son some starter money, showed him how to research stock options and let him make his choices. Maybe he does well, maybe he doesn't. Stock market is like gambling but at least he could have learned about it until he started making his own money to invest.

 

[SarahFair]

We definitely don't mind if he invests it in stocks, he has had an interest in it for a few years now.

We just don't want the money sitting about getting spent on fast food and gas.

 

[Buck70]

CD's right now

 

[Jim Baker]

Find a mutual fund with a good track record and park the money there in an IRA, reinvest the dividends and for get it. Compounding will make him a rich man when he is ready to retire.

I am partial to Fidelity funds, but that is just that is what I started with.

 

[westcobbdog]

In addition to the 1k ( I would buy some stock shares with it and forget about it ) I would get him a Netflix acct. in his name where he pays the bill every month and can watch his credit score soar, giving him real power when he does get ready to borrow money.

 

[ucfireman]

Roth IRA

 

[Howard Roark]

Georgia technical colleges are almost free.

If he works with his hands, can show up on time and is willing to work I can connect him with a trades group that will start him around $15 and pay for education. He can make $100k a year after completion.

 

[SarahFair]

Georgia technical colleges are almost free.

If he works with his hands, can show up on time and is willing to work I can connect him with a trades group that will start him around $15 and pay for education. He can make $100k a year after completion.

Thanks! He's currently surveying and seeing if that is an avenue he wants to pursue long term, if not, I may send you a PM

 

[Howard Roark]

Thanks! He's currently surveying and seeing if that is an avenue he wants to pursue long term, if not, I may send you a PM

sounds good.