Key Takeaways
- Starting early matters. Regular contributions and gifts can gradually build a foundation for your child’s future.
- Consider where the money belongs. If funds are intended as a gift to a child, ask about account arrangements that clearly establish ownership.
- Understand how custodial accounts work. An adult manages the funds for the child’s benefit until the applicable transfer age.
- Family members overseas may also contribute. Ask your bank about the requirements for receiving funds from abroad.
Building Your Child’s First Savings Starts With Planning Early
A red envelope at Lunar New Year. A birthday gift from grandparents. A small amount set aside each month. For many families, saving for a child begins with simple gestures and the hope of giving them more opportunities as they grow.
But beyond deciding how much to save, there is another question to consider: Where should that money be kept?
Leon Sung, Managing Director and Chief Business Officer, says many families start by depositing these funds into a parent’s account, planning to pass the money along later.
“The best gift for a child is not necessarily more money, but an earlier start.”
A Gift From Grandparents With a Longer-Term Purpose
Leon recalls a couple visiting Los Angeles from Asia to meet their newborn granddaughter. During their trip, they came to New Omni Bank to ask about opening her first savings account.
They hoped to contribute each year toward her education and create a place where birthday gifts and red envelopes could accumulate over time.
Initially, the family planned to deposit the money into the parents’ account. Then the grandparents raised a question: If the money was a gift to their granddaughter, could it belong to her from the beginning?
For Leon, it was a question many families share: how to keep a child’s savings clearly identified and preserve the purpose behind each contribution.
Choosing an Account That Reflects Your Intentions
Leon introduced the family to New Omni Bank’s Kids Savings Account, a custodial savings account established under the California Uniform Transfers to Minors Act, or CUTMA.
With this type of arrangement, the funds belong to the child. An adult custodian manages them for the child’s benefit until the applicable transfer age, when the child takes control. That makes the decision about more than interest rates: families should understand these responsibilities before deciding whether the account fits their intentions.
For the visiting grandparents, the account answered their question: their gift could belong to their granddaughter from the start.
You Do Not Have to Be Wealthy to Start
Planning for the next generation can sound like something reserved for families with substantial assets. Leon encourages parents to think about it in more everyday terms.
Setting aside $100 or $200 a month, saving birthday money, or depositing a child’s first red envelope can all be starting points. Contributions do not have to be large; starting earlier simply gives families more time to build them gradually.
“What matters is not just the amount, but making a conscious decision to start planning.”
Connecting Family Support Across Borders
For many families, children grow up in the United States while grandparents and other relatives remain in Asia. Supporting a child’s future can be one way to maintain that connection across the distance.
Leon says families often ask whether relatives living overseas can contribute to a child’s savings. They may be able to, depending on the applicable requirements.
Before arranging a transfer, ask your bank what information is needed to receive funds from abroad.
Saving Today Can Create More Choices Tomorrow
Parents and grandparents may begin saving with a particular milestone in mind, such as college. Leon sees the larger goal as creating choices. Savings may one day support education, a study-abroad experience, a business idea, or a first home, depending on the account arrangement and the child’s circumstances.
“What we leave children is not only the savings themselves, but more freedom to choose their own path as they grow.”
The first step does not have to be complicated. Consider what you want the money to accomplish, how you hope to contribute, and which account arrangements suit your family’s needs.
To explore our Kids Savings Account or discuss banking arrangements for your child’s future, contact New Omni Bank:
This article is adapted from content originally published in collaboration with Chinese L.A. Daily News.
The information provided in this blog is for general informational purposes only and should not be considered legal, tax, financial, or investment advice. All content is subject to change without notice. Please consult with a qualified professional or contact New Omni Bank directly for personalized guidance or the latest product information.
