Bonus Bonds

Now that I've been reasonably successful with my Fuzzi Bunz sales I want to start putting more money into Caitlin's savings account.

We currently just have an automatic payment going from our bank account into hers (BNZ) but I'm hoping to get into something that will be better for her long-term (We don't want it to be available to her until she's 21).

I'm not that keen on investments as we've had our fingers burnt before, but I've read some info and the Bonus Bonds seem quite low risk.

I was just wondering if anyone else had these for themselves or their kids?

Are they ok to use as savings with top ups if they win the prize draws?

Do you actually lose money at any stage?

Ta

We have them for Kobe and Addison. Every so often we add to them and they can win each month, some of the prizes are actually quite big.
Im pretty sure there isnt really a risk with them and they are so easy. We have it so any little prizes they win are reinvested which would give them more chances to win aswell because every dollar bond you have is a chance to win. When they are older they can decide what they want to do with the money.

Oh and forgot to add, they are also very handy if people are stuck for presents. At christmas we just told people they could just buy the kids some bonus bonds rather than presents because they got so many presents!! and all you need to do is give people the number and they can buy some although most actually gave us the cash to put towards it. Kobe collects our neighbours mail for them when they are away and they pay him $10 every month so we just put all that onto his bonus bonds.

Edited by my2angels

Bonus Bonds are available via any ANZ Bank. My grandma bought some of these for me when I was born, or soon after, and after I started working as a teenager I added to them bit by bit until I had $600 in bonds. There's no risk with them as far as I know, but documents available from ANZ would confirm that. However there's also no guarantee that you'll make anything from them. I had something under $20 aside for about 15 years and never won a cent. After I had $600 I did end up winning a couple of $20 lots. In the end I decided I was better off putting it in a savings account and earning interest... which is what we've decided to do for our kids' savings.

my grnadfather had $36,000 in bonus bonds. must have been pretty low risk for him to put his money there. Not sure if they accumulate interest. I know Natiuonal bank does an interesting bank account dedicated to saving for kids education and the the PSIS has a good kids account too.

you can also get them at post shops i think. My neice has about $500 and wins all the time, mainly $20 but she has had something like $50 too. I figure until i get it built up to a decent amount the interest they would receive at a bank would be so minimal and then of course you have to pay fees until you reach certain amounts. If the bonus bonds build up to a large amount then i might look at putting them into the bank but otherwise if they even won $20 in a year or two then its more interest than they would have got at the bank.

Thanks so much ladies!

I think we're going to transfer her savings into the Bonus Bonds. It really P's me off that a baby's savings are taxed at the parent's income rate with banks, so even if Caitlin doesn't win "the big one" at least I know what we put in there is what she will actually get (with the chance of winning top ups).

I gave BNZ her IRD# but she still gets taxed at a child rate. I still think that is REALLY unfair!

Bit off the topic but have you guys heard about that savings/investment thing the government is bringing in this year? Apparently they are going to automatically take either 4% or 8% of your pay and put it into an investment thing, you can chose either high or low risk. Basically apart from a few specific situations you cant get the money out for 5 years and they are going ot just start doing it and its up to you to ring them if you dont want it to happen. I hadnt heard anything about it till my friend who has her own business got a letter about it from the ird.

My mum had $60k in bonus bonds and did really well with such a large investement but only becuase she had a greater chance og winning. To be honest even with Caitlin getting taxed I personally think it's not a bad idea to leave the money in a really good savings account and/or flick it to a term investment when you get enough.

With the government savings thing, if you start new employment you have the option to opt into Kiwisaver and that is when the enforced savings come in. Once you are in then you're in and what B is saying is that it won't be able to be touched until you are 55...much like your work super schemes.

At the risk of getting slammed I think it's a good idea. Most of NZ is debt to thier eyeballs and live totally outside their budget if they even have a budget. I'm all for anything that can help people save money. Besides 4% isn't that much...it's the amount I had going to my super.

Oh and B just said that the tax on bank accounts gets claimed back when you do a tax return for your child at the end of the tax year. He said you get most if not all of it back.