Shares for children

With Bonus Bonds becoming a thing of the past, I'm looking at where we can put the $100 for birthdays and christmas for the grandkids. I'm thinking Sharesies might be the best option, but also I'd like to invest in some australian shares for them and it doesnt look like I can do that with Sharesies. I'd quite like to take the money in their bonus bonds now (about $1k) and put that lump into an ASX share that I think has long term potential. How can I do that. Can I buy them with my own account (Direct Broking) and do a share transfer? How do I transfer shares to someone if they dont have any shares at the moment. Feeling a bit lost on this.

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Originally Posted by suse

With Bonus Bonds becoming a thing of the past, I'm looking at where we can put the $100 for birthdays and christmas for the grandkids. I'm thinking Sharesies might be the best option, but also I'd like to invest in some australian shares for them and it doesnt look like I can do that with Sharesies. I'd quite like to take the money in their bonus bonds now (about $1k) and put that lump into an ASX share that I think has long term potential. How can I do that. Can I buy them with my own account (Direct Broking) and do a share transfer? How do I transfer shares to someone if they dont have any shares at the moment. Feeling a bit lost on this.

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Via Sharsies you have access to the pie funds Australasian dividend fund .
https://www.piefunds.co.nz/Performance-and-Unit-Prices
Min investment is normally 25K so this is an awesome way to get in .
Suse I used to put 1000 a year into a company and transfer into my daughters name . But you have individual stock risk and even good things ( pumpkin patch) can go bad . So better let a professional do it and when something changes they can turf it out of the portfolio ....
I have the dividends reinvested and as you can see from the past performance they have done very well .

crikey that growth 2 fund has a pretty healthy return!!!

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Originally Posted by suse

crikey that growth 2 fund has a pretty healthy return!!!

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Yes , one of the few places I trust my money with .
Basically a dollar in for my girls 8 years ago ( reinvested) is over 3 ...... in the dividend fund . Just have to keep the balance secret from the boyfriends :)

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Originally Posted by stoploss

Suse I used to put 1000 a year into a company and transfer into my daughters name .

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So do you mean I could just do a off market transfer of shares I own (or decide to buy) and put them in the kids names?

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Originally Posted by suse

So do you mean I could just do a off market transfer of shares I own (or decide to buy) and put them in the kids names?

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yes you can , but then operationally it became difficult when things changed . As I Understand it children can't trade shares so when things went wrong ,I wasn't able to get out for them .... Might have been better in a Trust with them as a beneficiary,but compliance involved in that as well.
My experience is ,best let the experts do it,saves an awful lot of time and hassle .....

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Originally Posted by suse

With Bonus Bonds becoming a thing of the past, I'm looking at where we can put the $100 for birthdays and christmas for the grandkids.

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Did Bonus Bonds actually give a return? I heard that most of them don't, so your money just got eaten away by inflation.

With the thread being shares for children, can Sharesies have accounts that are fully in the child's name rather than Parent (Child account)?

My children have accounts with ASB and NABTrade but as they are the Parent (Child account) type I am still up for the tax and so don't use them.

With InvestNow the account can be fully in the child's name so I now use this to invest for them although there are only only ETFs and no direct shares.

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Originally Posted by Cricketfan

Did Bonus Bonds actually give a return? I heard that most of them don't, so your money just got eaten away by inflation.

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They used to, there would often be an envelope (remember those?) arriving with a $20 to $100 tax free prize. I likely still have a few but took almost all out a few years back to use for better purposes. I'd perhaps better follow up on my Premium Bonds in the UK too.

Yeah I understand there were prizes, but typically what would the annual return have been? More than a term deposit?

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Originally Posted by Cricketfan

Yeah I understand there were prizes, but typically what would the annual return have been? More than a term deposit?

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There was a chance when returns on TD's were a lot higher than how (so a lot more RWT would have been paid on the TD alternative). ANZ investing in a mix of TD's and government stock guarantees that expected returns are less than TD's in a low interest rate environment with the extremely high management fee that applied (Stuff quoted 1.28%!!). With higher TD rates of at least 4%, bonus bonds could have had an expected return equal or better than TD's but that would depend on what return ANZ got on the invested monies and therefore the prize fund compared to the TD options available (and of course whether you won prizes).

4% less 33% tax is 2.68%
4% less 1.28% management fees is 2.72%

With TD rates around 1.4% this becomes 1.4% less 33% = 0.94% from TD's. Bonus bonds are 1.4% less 1.28% = 0.12%. Add some government stock at under possibly under 1% into the funding mix and ANZ doesn't have the money to even generate a prize pool after paying its management fee.

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Originally Posted by Scrunch

(and of course whether you won prizes).

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That's kinda the critical bit though - what was the probability of winning prizes each year? Was it such that if you stuck at it long enough, you should win enough to do better than TDs? Or would only a small percentage of people do better, with the majority winning bugger all?