Investor · Apex, NC · Member since 2017 · 135 posts · 97 votes
Looking to save money for my children for expenses throughout their life (first car, braces, sports/ class trips, etc).
Currently saving the majority of the money in a CD (2.8% interest) so the exposure to inflation is a little hedged at least.
I know this isn't the most aggressive option, but does anyone have any other ideas how to save money that can be accessed within short order as needed for expenses throughout their life? Only current risk is sacrificing previous 90 days of interest accrued, but can be cashed in at any time.
@John Blanton to be honest, the 2.8% was a lot higher than I was expecting. Everyone is different, but I almost treat these as emergency funds (i.e. I not worth the risk of letting my kid not go on the field trip). So, not sure on the exact amount here, but I imagine you are talking sub $20K. If that is the case, I would honestly just call the upside that you are missing out on a wash and don't worry too much about it. That is just my take though. If you were in the 0.005% range I think you might want to investigate a better option ;)
To Ryans point above, 2.8% CD is excellent, especially if you are referring to the very short term.
If you have the ability to pencil in bigger ticket items with a defined date, you could potentially do better. For instance if your kid is 5 and you are saving for his first car.... sitting in a CD for 10+ years is overly conservative.
Bucketing your cash reserves by time frame should give you some confidence to add other opportunities. As opportunities approach, systematically wind down to CD's again or something comparable.