For 16 year old--CD or Savings Account a better option?

I'd like to set back some money for my 16 year old, mostly to help when he's a bit older and ready to be on his own. Would a CD or Savings account be the better investment option? (Or something else??)

One thing to take into account is how long you'd like the money tied up (i.e., how long until he can make withdraws). Long term CDs obviously offer better rates than short term CDs, and CDs in general offer better rates than savings accounts. If you're keeping the money tied up for a year or more, I'd look to get into a CD after the next federal reserve interest rate hike (I expect interest rates to peak sometime around that time).

Below is are links to websites which show top interest rates for CDs and savings accounts.

I think a CD would be better - so that she can earn more interest and there would be restrictions on when she can take the money out, so she doesn't spend it all right away.

If he's not going to need the money right away, better to go with a CD for higher yields.

CD, so that she won't be able to spend any of the money, and the CD will earn interest, and it will be good for her future!

I would say of the two choices, a CD will definitely get you a higher rate of return, which makes that a better option. However there are other ideas you might want to conisder can earn higher rates of return, such as a money market account, which isnt FDIC insured but safe regardless, or a balanced mutual fund portfolio, such as Vanguard 500 index which will give you exposure to the entire market and provide a good long term return. The key is to assess what your risk tolerance is weigh that against potential long term rewards. CDs and savings accounts are as safe as they come, but at the expense of lower returns. Cheers

if you open a trust account you have the ability to place a hold on the account for a time period, your child would not be able to do anything with it, but however the yield would not be as high was a CD account but not a big difference one percent or so

Hi-
How old is "a bit older" 2 years? 5 years? 10 years? How much are you planning to invest?

For the short term a CD or money market would be fine. If the time is longer you should look at alternative investments such as a diversified portfolio of mutual funds or municipal bonds. Speak to a professional about this and I'm sure they will try to help.