9 Financial Gifts for Babies, Kids & Grandkids

Whether investing in a baby fund, matching contributions to a custodial Roth IRA for a kid with earned income, opening savings accounts, buying some stock in a custodial brokerage account, purchasing a savings bond or even savings bonds alternatives– you’ve got a number of financial gift options.

Financial gifts come in all shapes and sizes and it’s important to know which ones will work best with your intended recipient’s current situation. Some of these financial gifts include 529 college savings plans, Roth IRAs, donor-advised funds, life insurance policies, trust funds and more!

What is a Financial Gift?

Financial gifts for newborns can act as an immediate form of assistance through help paying bills or money to buy necessities that could make home life easier. It can also help for the long-term by setting up a 529 plan or buying some savings bonds to help pay for future tuition expenses.

Financial Gifts for Babies

A baby fund essentially acts as a savings account earmarked for baby-related expenses now or in the future when the child arrives. It allows you to contribute money toward the child’s expenses as part of a savings plan.

1. Baby Funds

You can use 529 plans to cover tuition for your child or grandchild at a private school and pay for books and supplies in college years later (up to $10,000 per year for elementary or secondary school tuition).

2. 529 Plans – Best Investment for New Baby

Popular with grandparents, these types of bonds differ from other bonds in that you can’t sell savings bonds to other investors in the market. Meaning, you can’t hold them in a brokerage account.

3. Savings Bonds for Babies and Kids

Another great idea for starting a baby off on the right financial foot is through a custodial account. These tend to perform better over time due to their higher returns than bonds and act as a great savings bond gift alternative.

4. Custodial Brokerage Account

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