And there's the catch!!
I signed up my daughter for one of these accounts, lured in by the 4.75% interest rate. What I wasn't told when signing up is that after a year they empty the account back into the linked account earning next to no interest. Then you can only put back max $250 per month, effectively destroying the 4.75% interest rate for the remaining amount in the linked account. In my opinion, an ING account is much better long term.
What a silly account.
What is the point of this account when after a year all the money is taken out of the account and you have to start again. I'll tell you what the point is to get people to open an account that sounds too good to be true, and hopefully they don't realise how horrible it is and if they do, hopefully they don't close it.
Only good if you have a small amount to start with, less that 1K and then once the year is up close the account and go elsewhere.
Make sure you know when opening that at the end of the first anniversary they transfer the full amount back out the high interest account into the regular account and you have to start all over again. If you work it out you are better off with an account earning 6.5% on a regular basis with a lot less hassle. They advertise a decent 10% interest, but what they dont tell you is the max you can every have in the account is $3000 before the 'Anniversary Transfer' when they move it all out, you go to check how much interest your account has earned, only to find $1 sitting in there. We thought we had been robbed! Fortunately not, but very unimpressed none the less.
The initial draw of the 10% interest. Lets face it the 10% would be worth it, its for your kids future for goodness sake!
Not being told at all that they transfer all the high interest savings back to the regular account.
I got caught with this account but I know it was my own fault. I deposited $300 and my son earnt only 0.01%. My advice is to read the fine print. It wasnt easy to explain that its good to save but not if you save too much! Or that its better to only save a certain amount. Sounds better in theory as a product then it does in a practical teaching sense when you get to the point of letting your child have more influence over the decision making.
Good rate if you follow all the rules. Not so good for teaching kids to save all surplus cash.
Conditions I forgot about
Excellent savings account for kids
I started this account for my son when he was born, as he received a fair bit of money as gifts. I have never had an issue with this account, it seems to be perfect. It has a high interest rate, with bonus interest credited monthly. It has a monthly maximum deposit limit of $250 but if he has more than that I can deposit it into the linked 'regular' savings account and transfer it over during next month. This is great because he is still earning high interest but will not go over the thresholds that would require him to pay tax or submit a tax return.
no fees, online access, high interest rate, great customer service
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