Investing is a scary word for most people. Because of the fear it strikes into our hearts, this often means that most people don’t take advantage of it beyond 401Ks (sometimes not even then). That’s why Ksenia Yudina, former financial hotshot — I guess now an even bigger financial hotshot — started her own app that helped parents start investing for their children. No complicated process necessary. In fact, with her new investment app for kids, you can create a successful investment plan in less than 5 minutes based on the age of your children and your financial goals.
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What is UNest?
UNest is a new investment app that allows you to save/invest for your children’s future. You can save for college, weddings, first car, or a down payment on a house.
While other financial plans for children are usually a little more rigid, UNest’s UTMA accounts, help create more flexibility when it comes to saving for your children’s future.
With common savings plans for children, like the 529 plan, your child will receive bigger tax penalties if their savings are not used for qualified educational purposes. UNest
Grandparents can help invest, too!
Another great perk about UNest is that you can get other family members in on the deal! UNest has made it easy to receive financial contributions from other family members who are also invested in the future financial success of your child(ren).
In order to have family contribute, all you are required to do is send your specific code to family and friends. Then they are given the option to contribute to your UNest account.
This can be an especially great option around Christmas time. Instead of giving toys that they will ultimately grow out of, family members can help contribute to their future life goals. Get signed up in just 5 minutes!
What are the costs?
Like any type of investing, there is going to be fees at some point. Thankfully, UNest has been set up in a way that is designed to minimize these fees.
To get started
To get started with UNest, the cost per month is $3 per child, $6 for a family (up to 5 children).
Rather than add in complicated costs or percentages, UNest wanted to make an affordable, flat rate that was really up-front with parents.
Because you can contribute up to $15,000 per year to your child’s fund, they have the potential to earn up to $2,200 per year.
The first $1,100 earned is completely tax-free and earnings after that are subject to the “Kiddie Tax” law. (Yeah, it’s actually called that.)
Because this is money that is invested after taxes for both parents and family members who decide to gift, there is no tax write-off available for UNest.
How does investing work?
You have a total of 5 different type of investment options that will be more or less aggressive based on the age of your child. The younger they are, the more aggressively they can invest.
Here is more on UNest investment options taken directly from their website:
- A conservative option that invests in fixed income and bond ETFs
- Three age-based options (conservative, moderate, aggressive). Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older. The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.
- An aggressive option that invests 100% in equities via Vanguard equity index ETFs.
What if I have no clue how to invest?
I know this may not all make sense. Having researched investing over the last few years, I can honestly say, reading some of these terms still makes my head spin.
Thankfully, UNest is registered as a financial advisor and is designed to help you choose the best plan for you based on your children. That means you don’t need to fully understand all the investment talk in order to reap the benefits. Start your UNest account now.
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When do my kids get their money?
Your children can start withdrawing their money once they reach the legal adult age (usually between 18-25).
While many parents may be tempted to withdraw money from their child’s UTMA account if and when a financial setback takes place, this is legally not something you can do.
UNest has worked to make things flexible as far as what this money can be used for, however, it’s still to be remembered that this money was a gift to your child. Therefore, it is their right to use the money when they are of legal age.
How do I sign up for UNest?
Ready to start investing in your child’s future? Click here to sign up for UNest. All you will need is the following:
- Legal name
- Date of Birth
- Social Security Number or ITIN
- Address of residency
- U.S. Citizenship or legal residency information
- Legal US bank account
From there, you will be prompted to set up your child’s portfolio. All of this is designed to be quick and to the point, so you can easily set up an account in a matter of minutes. Click here to get started.