CD rates for your kids

While you may be searching for the best savings rates for your own deposits, you can also put your kids on the fast track to savings with a certificate of deposit. Now, I know CD rates are low, but investing in CDs is also low-risk and low-hassle.

There is one credit union based in Illinois that is hoping to encourage parents to invest in their children’s futures with CDs. BCU is currently offering a special 36-month Kids’ Certificate with a 1.55% APY. That’s quite the jump compared with the credit union’s standard 36-month CD, which earns a 1.05% APY.

Now, I know what you’re thinking: why don’t I just put all of my cash in this kids’ CD? You could, but your child’s name and Social Security number must be listed first on the account. Your child also must be 18 years old or younger.

Max out your cash

If you have a large sum of cash to invest in your child’s future, you may only be able to put a portion of it in a CD at BCU. There is a $25,000 maximum balance per child.

Accelerate your own income

There are opportunities for you to earn more interest at the credit union, too, but you’ll need to satisfy some additional requirements. While I mentioned that the standard 36-month CD at BCU earns a 1.05% APY, the institution also offers a Rewards Rates program. If you qualify for the program, you’ll be able to earn a 1.3% APY on that same CD.

Here’s what you need to do:

• Arrange a direct deposit of at least $500 each month into a BCU checking account
• Have at least $25,000 worth of deposits
• Have a loan account – mortgage, home equity, auto or credit card

Essentially, you’d need to make BCU your primary credit union, in which case you would join 140,000 other members. The institution has a rich history that dates back to 1981.