I would like to give my Godson money but in some form that won’t allow him to cash it until he’s 18. I’m worried that his mother will take the money and use it for something that will benefit her and not him. I’d also like for the funds to accumulate up to 5,000 by the time he’s 18. He’s 8 now. Can anyone help?
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Savings bonds are the easiest method, but return on investment right now is horrible. You can set up a custodial account called UGMA. (uniform gift to minors act) which you control as “custodian” until he turns 18. He can then do WHATEVER he wants with the money at 18 years old. You can use any type of investment for the UGMA, mutual funds, bonds, certificates of deposit. I would suggest a large cap growth mutual fund. Your options depend on initial amount invested. Look at the larger fund company websites such as T Rowe Price, Vanguard and Fidelity for information to open account.