I opened savings accounts for my children recently and they have aquired about $500 together. I'm wondering if I should pool their money and open a CD since rates are so high right now. What do you think?

You could do that, but at $500 the interest isn't probably going to be significantly different. Also depending on their ages, they may be more impressed with having their own account than earning a bit more in interest.

Either way would work.

I would just keep it as a general savings account for now, one with higher interest than a regular account if possible.
Even $10 a week put away can be a gold mine for your child once they hit 18

Depending on the ages of your children you might even find a bank that goes the extra mile. For instance my family just moved and we set up the transfered savings account for our kids. This bank provides a store. Every actual dollar you put in savings results in a dollar of funny money that can be used to purchase actual products (some are pretty nice - most are innexpensive items). They can get a bag of popcorn while they redeme their funny money. My kids have been saving more since we got here than ever before. Incentives - who knew.

Where is this bank? I'd like to pass the ideas along to our local banks and see who follows through. My boys are only 7 and 9, but already they like to save money. They want horses, so we told them they have to save enough to buy the horses and equipment AND they have to work to pay for the upkeep. With me, they are starting a flower nursery and we are splitting the profits.

They would love the idea of a store in their bank, though.

Right now, their money is in a non- traditional bank because of the higher interest (1 1/2%), but we might look at moving if our local banks would step it up.

I agree with the other posters. Keep it in the bank acocunt. The children will probably be happier to see the money accumulate in their bank statements.

It's actually a tiny bank in Kansas. I don't know if they dreamed this up on their own or if there is a company that helps get this kind of thing started, but the kids are looney for it.

Try talking to a credit union. We have a credit union in our area that applies a 3% bonus to deposits made into a childrens savings accounts up to $50 a year plus a 3% interest on the account. But the catch is that these act like a CD with penalties for early withdrawal.

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My husband is a teacher, so I could get him to stop at the local teacher's credit union. Other than that, we aren't eligible for other credit union's in our area.

I did talk to one of my local banks and they said there was a CD that I could open that pays 4% for as little as $50 to start as long as there was a direct deposit going in each month. That seems like the best deal so far. Most CD's want thousands, not hundreds.

PayPal has a money market program that currently has a 4.7% rate of return. I know it's not a bank, but there is no penalty for withdrawl when needed either.