A Different Kind of Gift For Your Child

Photo credit: pbs.org

We can now feel the cool breeze of Christmas. This also means cash blessings on the way. Almost all are very excited to receive (and some just did) their bonuses and 13th month pays. I just heard from the news this morning that half of the 13th month pay of government employees will be given this week. Yahoo!  But before you think of spending your bonuses right there and there for parties, gadgets, travels and appliances, why not "spend" them wisely for the betterment of your future. Specially for parents, this is the perfect time to give a different kind of gift to your kids. Way better than giving out toys, clothes or gadgets (Ipad, newest cellphone model...), why not give your kids something that will benefit them in the future. Let this be the start of their exciting financial journey.  

It is a good idea to open a mutual fund account for your kids best intended for their education.Parent(s) can open a mutual fund under an In-Trust For (ITF) Account. A parent stands as the  primary account holder and the child is the beneficiary. In this case only one (either the father or mother) can be the primary account holder and cannot be both or joint under the ITF account. 

Opening a mutual fund ITF account is just the same as opening a standard individual account. Initial investment is also as low as Php5000. Know what kind of mutual fund you prefer. If you're planning long term say 10 to 15 years, equity fund is highly recommended. You may check sites of FAMI and PhilEquity for their document requirements. As with Sunlife, it is best to contact the office nearest your area. They require one-to-one consultation. One just have to add the following documents:

1. Child's one (1) valid ID photocopied

2. Child's birth certificare ( must be below 18 years old) photocopied

For those who are not into mutual funds and prefer direct investment in stocks, COL Financial has ITF account as well. You may check their site for the requirements and thoroughly read their ITF Supplementary Agreement .

But for those who don't have kids but so generous to give monetary gifts to their pamangkins, they can also open an ITF account for them. The uncle or aunt is the primary holder that takes total control of the account and the beneficiary is the pamangkin ( niece or nephew). Same requirements are needed; however, mutual fund companies still need the ITF person (child) identified properly.

Helpful readings:

http://brighterlife.com.ph/2013/08/26/how-i-taught-my-kids-to-invest/?category-ref=family-life
http://www.mb.com.ph/a-financial-guru-talks-about-how-young-people-can-make-their-money-grow/
http://richardmacalintal.com/how-we-prepare-our-1-year-old-baby-to-be-financially-literate/


God bless everyone!