# ing interest rates



## bootsie (Aug 30, 2010)

Regular savings accounts are 1.5%
Children's accounts are 2.0%. 

For some stupid reason there is a discrepancy.. those with kids can move their accounts to the children's accounts and take advantage of the 2% rate. Those without kids are screwed by 0.5%.


----------



## m3s (Apr 3, 2010)

So if you have $1,000,000 in your ING, your kid will pay for him/herself?


----------



## Jungle (Feb 17, 2010)

Have a look at these:

2.5% PC Financial on new deposits until April. 
2.0% Ally, normal rate. 

I have both above, and ING


----------



## NorthernRaven (Aug 4, 2010)

I looked at the PC 2.5% - it is only for RRSP and TFSA accounts, so it seems more like trap bait, unless you want to keep the money there afterwards. You'd need a substantial amount to make up for the $50 transfer-out fee.

I'd suspect the 2% on ING child accounts is an introductory thing, or there are amount limits, or something - I doubt if there will be a permanent gap of this size. Otherwise parents could indeed use their kids as financial beards and make more interest. Either ING doesn't think it will be common enough to care about, or it won't be a permanent thing.


----------



## Jungle (Feb 17, 2010)

Also with ING is they always have some promotion going on, $25 friend referral, or save for 6 months get $25 after, etc. Depending on how big your deposit is, the $25 bonus could be more interest than other saving accounts.


----------



## carverman (Nov 8, 2010)

bootsie said:


> Regular savings accounts are 1.5%
> Children's accounts are 2.0%.
> 
> For some stupid reason there is a discrepancy.. those with kids can move their accounts to the children's accounts and take advantage of the 2% rate. Those without kids are screwed by 0.5%.


Any savings acct is subject to income tax, and if there is enough interest
earned the parent or child will receive a T5 early next year. I don't fully
understand how it works for a savings acct opened for a child, but the
bank would have some records on that and send the T5 to the parent of
the child. I'm not sure what a child is supposed to do..file an income tax
for the year for just the T5 with no income earned, or if that interest
has to be declared by the parents on their income tax. AFAIK, if it's
not a TFSA or a RESP acct, then a T5 can be issued by the banks and
somebody may have to pay income tax on the interest.

So if it's the parents, then depending on their tax bracket, it could be
as much as 30% less if the gov't gets about 0.5% of the interest paid.

Maybe somebody can explain better..but right now..other than instant
liquidity/acces to the savings acct, the money is "rotting" as far as real
growth compared to the cost of living increases.


----------



## domanb (Aug 5, 2009)

ING's interest is now up to 2%


----------



## Plugging Along (Jan 3, 2011)

carverman said:


> Any savings acct is subject to income tax, and if there is enough interest
> earned the parent or child will receive a T5 early next year. I don't fully
> understand how it works for a savings acct opened for a child, but the
> bank would have some records on that and send the T5 to the parent of
> ...



Accounts for the kids are still governed by the attribution rules. For interest and dividends, the parent (or who ever gave the money) is suppose to claim the interest. If the child earned the money themselves, then they would claim it at the same time they do their tax return.


----------



## Addy (Mar 12, 2010)

We've been at 2.1% for quite a while now with our Credit Union.... hopefully the rates will go up soon.


----------



## carverman (Nov 8, 2010)

Plugging Along said:


> Accounts for the kids are still governed by the attribution rules. For interest and dividends, the parent (or who ever gave the money) is suppose to claim the interest. *If the child earned the money themselves, then they would claim it at the same time they do their tax return.[/*QUOTE]
> 
> If the child has a SIN and a part time job, that would make sense,
> but if the parent opened a savings acct (not an RESP or TFSA), in the
> ...


----------



## brad (May 22, 2009)

Addy said:


> We've been at 2.1% for quite a while now with our Credit Union.... hopefully the rates will go up soon.


Just keep in mind that when interest rates rise, it usually means that inflation is starting to climb as well. Interest rates are pretty much meaningless when considered in isolation -- back in the early 1980s I remember when a normal savings account paid 5% interest and GICs were paying 10%. But inflation was in the double digits, so for a regular savings account you would actually come out ahead at today's "low" interest rates.


----------



## Plugging Along (Jan 3, 2011)

carverman said:


> If the child has a SIN and a part time job, that would make sense,
> but if the parent opened a savings acct (not an RESP or TFSA), in the
> childs name and the child is..well lets say 5 years old..the child is supposed
> to file a tax return for the year?




Then this is under the attribution rules. Where is the money coming from? For the five year old, most likely the parents. In this case, the parents would claim the interest in child's account. The child did not contribute to their own account. Gift money is not considered the child's own contribution by CRA's definition. Meaning, the parents/grandparents cannot gift $100000 to a child to put in a savings accounts and expect the taxes to be under the child. 
The child does not file taxes, the parents do, or technically who ever gifted the money to the child. 

Even if the child does have a SIN, and the money is not earned by them, then the interest in the bank account goes to the parents for claiming on taxes.


----------

