# ING Children's Savings Account



## timmitchell (Apr 3, 2009)

I created an ING Children's Savings Account for my daughter when the bank was running a promotion and then ignored the account. However, I noticed recently that the interest rate is 2%, higher than most other HISA options I've seen. 

*Is there any reason not to put our family's cash savings in this children's savings account?* We have the future downpayment on a house that needs to be parked -- more money than you'd normally expect to see in a child's account. Our tax sheltered options, such as our TFSAs, are maxed out.

I wrote ING to ask about any restrictions and they said only that "The account is held jointly between yourself and your child until she turns the age of majority." However, I'm not clear on whether the "children's" label on the account is simply marketing or whether children's savings accounts in general have some special standing I should know about. (The account is *not *an RESP.) 

The account appears under the list of accounts I control when I log into ING under my own name. 

I'm assuming that I'll be responsible for the taxes on the interest, which is fine.

Thanks for any advice or suggestions.

Tim


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## gibor365 (Apr 1, 2011)

I have almost all our Cash in ING Children's Savings Account . I talked with ING rep couple of years ago and he didn't mention any restrictions, I frequently transfer money back and forth.... I have 2 such accounts, this year my son will be 18, so I'm moving all money to my daughter Children account. 
Yes, you should pay taxes on interest.


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## Chris L (Nov 16, 2011)

That's really interesting. If it's in the child's name, obviously you don't need to pay taxes on it. If it's your money parked, then yes, so if you benefit from the interest rate and it's your money, but you pay taxes on it, then I guess you're just gaming ING. Looking for other opinions. Bank pays 1.2% so 2% sounds pretty good.


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## timmitchell (Apr 3, 2009)

I don't think there's any question that you owe taxes on interest-generating assets that you still control. (I only mentioned taxes to emphasize that this was a question about qualifying for an investment, not minimizing taxes.)

This article does cover the topic of taxation, for those who are curious:
http://www.theglobeandmail.com/glob...d-and-mom-can-help-your-child/article4184409/

Thanks for sharing your experience with ING's children's savings accounts, gibor!


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## none (Jan 15, 2013)

gibor said:


> I have almost all our Cash in ING Children's Savings Account . I talked with ING rep couple of years ago and he didn't mention any restrictions, I frequently transfer money back and forth.... I have 2 such accounts, this year my son will be 18, so I'm moving all money to my daughter Children account.
> Yes, you should pay taxes on interest.


Wow, that's amazing - I didn't even know this existed. I've just had my extra cash sitting in an ING savings making 1.35% Not a huge deal but I'll take the extra 0.65% interest for sure.

Just to make sure I understand this:
- Account is joint between me and my 2 year old (which is hilarious because when he doesn't share and says 'mine MINE!' I inform him that in fact he owns NOTHING.
- I pay taxes on the interest
- I can put cash in pull it out whenever I want.

Is this all correct?


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## Chris L (Nov 16, 2011)

none said:


> Wow, that's amazing - I didn't even know this existed. I've just had my extra cash sitting in an ING savings making 1.35% Not a huge deal but I'll take the extra 0.65% interest for sure.
> 
> Just to make sure I understand this:
> - Account is joint between me and my 2 year old (which is hilarious because when he doesn't share and says 'mine MINE!' I inform him that in fact he owns NOTHING.
> ...


I'm in the same situation, and I think this is right. I just didn't think about ING not knowing the source or caring about it or having a cap on an amount and then the tax implication. ING sends out forms, but they might not for a child's savings account, but if you claimed it then who cares right. I guess the real question is why ING gives kids 2% and the rest of us chumps 1.25%?

My kid basically has gift money in it, 2k or so, not bad for 3.5 years....we usually request cash for savings instead of presents as like most kids, he has enough of everything anyway.


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## Addy (Mar 12, 2010)

Interesting, we have our cash, around 50K sitting in Hubert (HappySavings.ca) who I believe are paying 1.85% right now. It keeps changing so I'll have to double check. I love credit unions as they generally have better rates, but the convenience of ING (ie we have an ATM card and transfers to/from our regular banking accounts at TD are faster via ING it seems) is attractive. We have a 5 yr old so that child's account may be worth our while.


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## Plugging Along (Jan 3, 2011)

We have a lot of our money in our kids ING account. They get a lot of gift money, so just keep records of what is theirs and ours. We have had 6 figures in there, and there have been no problems. 

You do have to pay tax on the inerests on kids accounts Miles's you can prove that they earned it themselves. 

I called ing and asked why they had this, and it is to encourage kids to save money.


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## gibor365 (Apr 1, 2011)

I was writing about 2% interest of Children saving account several times .
No any problem with transfering back and forth. But note that this is Joint account between you and your child, ONG doesn't care about you filing taxes, but on T5 you will see your name.
From my understanding person who contributes money should claim interest while filing taxes....
Plugging Along, can you clarify how you filing taxes in this case? My kids also have several thousands in gifts, it's about 10% of the lump ammount. Also they have interest on interest (from previous year) - meaning their money and I'n not suppose to pay taxes on it....
But I get just 1 T5 for kid saying as an example $1,000. Can I substruct gift portion and interest and declare interest $800? I was thinking about it, but kinda afraid as CRA gets same T5 from ING and they may start to question me why not full amount of receipt was declared and go proof them that this was money from the gifts?

P.S. btw, if anyone opens new account in ING and refer Orange key of existing ING account holder, existing ING account holder get $20 or $25 ...pretty nice for a bank... 
P.P.S. refer my Orange key and I'm ready to give back 50% of this gift


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## Plugging Along (Jan 3, 2011)

gibor said:


> Plugging Along, can you clarify how you filing taxes in this case? My kids also have several thousands in gifts, it's about 10% of the lump ammount. Also they have interest on interest (from previous year) - meaning their money and I'n not suppose to pay taxes on it....
> But I get just 1 T5 for kid saying as an example $1,000. Can I substruct gift portion and interest and declare interest $800? I was thinking about it, but kinda afraid as CRA gets same T5 from ING and they may start to question me why not full amount of receipt was declared and go proof them that this was money from the gifts?
> 
> P.S. btw, if anyone opens new account in ING and refer Orange key of existing ING account holder, existing ING account holder get $20 or $25 ...pretty nice for a bank...
> P.P.S. refer my Orange key and I'm ready to give back 50% of this gift


I claim the whole amount for tax. The gift portion still gets attributed back to you as the parent. Only if kids are 'earning' their own money. We though about doing this for the UCB, but were told we should keep seperate accounts then, and the amounts were so small they were immaterial. 

We advised if there were larger amonts of money that our child earned, then it would be better to seperate, otherwise it goes back to you. Gifts don't count as earned amount.


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## gibor365 (Apr 1, 2011)

Plugging Along said:


> We advised if there were larger amonts of money that our child earned, then it would be better to seperate, otherwise it goes back to you. Gifts don't count as earned amount.


This is the point...you need to separate accounts, but if my child opens new account, he cannot get 2% interest as it's only for children saving account...


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## bettrave (Jan 10, 2013)

If I put the money that the governments (federal and provincial) give us for our children in ING children saving account, do I still have to pay the taxes on the interest?


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## gibor365 (Apr 1, 2011)

Have no idea..... but the fact that it's you who get the money because of your income and not your kids. And you get this money to support your kids.... Because we never got this money (CRA telling we earn too much ). , so it doesn't depend on kid, but depends on parent


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## RKS (Jan 12, 2013)

bettrave said:


> If I put the money that the governments (federal and provincial) give us for our children in ING children saving account, do I still have to pay the taxes on the interest?


Someone had mentioned this in another post, it may have been MoneyGal. If the government money is deposited into an account in the name of the child then the interest earned on that money is attributed to the child.


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## Plugging Along (Jan 3, 2011)

gibor said:


> This is the point...you need to separate accounts, but if my child opens new account, he cannot get 2% interest as it's only for children saving account...


I thought you could open multiple childrens accounts. I am not a 100% sure, as I have only one for each child.


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## Chris L (Nov 16, 2011)

Well, if you kid has cash and you have cash and want to keep it all simple, then just put your kids cash in your ING and your cash in theirs - or whichever is greater.

Then to be fair, give you kid the interest they didn't earn, but would have on their amount, because it was at a lower interest, for borrowing their savings vehicle. Now your kid is happy and so are you 

My kids money was earned through his birthdays and christmas, holidays, etc from family. He earned that money from his hard work growing up, so it's his. He isn't paying tax on that money and neither am I , he isn't out of the zero tax bracket! I chuck in some cash here and there for when he puts the cutlery away and such! The government isn't as stingy as we think it is, so don't worry too much. If you aren't trying to hide cash in your kids account to evade taxes, then you needn't worry.


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## Plugging Along (Jan 3, 2011)

^. Doesn't quite work that way. Can't say the kid gotta tend the money through gifts, so no tax. There is the expectations that the parent claims it. However, if the amounts are small then it's immaterial. I don't know how much would be considered material though. 

We throw all the money int the kids account, and we pay tax on the full amount.


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## gibor365 (Apr 1, 2011)

Plugging Along said:


> ^. Doesn't quite work that way. Can't say the kid gotta tend the money through gifts, so no tax. There is the expectations that the parent claims it. However, if the amounts are small then it's immaterial. I don't know how much would be considered material though.
> 
> We throw all the money int the kids account, and we pay tax on the full amount.


Same here. 90% of our available cash in children saving account and it's triple-digits amount.... yes, you can ignore it telling yourself that this is kids money and CRA can miss it for several years, but occasionally they can check it....
And how you gonna proof that money are from gifts?! 
In our case, maybe 10% of the amount is coming from interest on interest and money gifts my kids got from relatives., but if CRA start asking, if will be so big mess to ask all relatives to write backdated letters to prove it and who remember what was exact amount?!

My question is... if in theory we get joint T5 receipt (with kid) for $1000, can I declare and pay taxes just for $900? or it would be too suspicious?


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## gibor365 (Apr 1, 2011)

RKS said:


> Someone had mentioned this in another post, it may have been MoneyGal. If the government money is deposited into an account in the name of the child then the interest earned on that money is attributed to the child.


maybe, but I'm not sure as not kid , but you getting money from the government and this is your source of income. 

better to call CRA rep to verify (even though when I call them usually they know nothing and just reading general info from their website).
...


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## Chris L (Nov 16, 2011)

Yes, messy and probably why CRA isn't all that concerned. Money goes into ING around birthdays, Christmas, easter, etc. so it makes sense. If the amounts are relatively small, and it doesn't appear as though you're evading taxes, it's going to be just fine. Earning 2% on 2k isn't worth the governments time IMO. Inflation eats all that for lunch - by comparison. Sometimes we forget that CRA is run by real people, people like you and me. Just don't piss in their cornflakes and they wont barf on your lunch!


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## Plugging Along (Jan 3, 2011)

gibor said:


> Same here. 90% of our available cash in children saving account and it's triple-digits amount.... yes, you can ignore it telling yourself that this is kids money and CRA can miss it for several years, but occasionally they can check it....
> And how you gonna proof that money are from gifts?!
> In our case, maybe 10% of the amount is coming from interest on interest and money gifts my kids got from relatives., but if CRA start asking, if will be so big mess to ask all relatives to write backdated letters to prove it and who remember what was exact amount?!
> 
> My question is... if in theory we get joint T5 receipt (with kid) for $1000, declare and pay taxes just for $900? or it would be too suspicious?


What I am trying to say is that gifts to the kids, are still arable in YOUR hands even if they come from other people. In theory it should be attributed to the person that gives them the money. Even allowances that you give them are attributed back to you,, even if they earned it.

if the interest is $1000' then you should claim the whole amount otherwise the numbers don't match, and even the computers hat do the check will catch it. The other option would be to o a tax return for our child, but then ,it is still not their income.


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## Chris L (Nov 16, 2011)

I think you meant _interest_ on gifts of kids is taxable to the parent.


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## Chris L (Nov 16, 2011)

ING is running a 2.5% ISA account bonus right now on new money, so just it in that and then move it to your child's account after.


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