Investment for Grandchildren – Insurance Bonds

When it comes to insurance bonds Adelaide, many institutions will not accept investments in the name of a minor. However, if a grandparent or parent holds the money as a trustee for a child, the trustee can be liable children’s tax at high rates. If you try getting around children’s tax by investing in the name of either of the parent, the income from the investment can affect their family tax payments, which means it will push them into higher tax brackets. It may even hinder eligibility for the superannuation co-contribution. In case the grandparent invested in their name, they could lose some aged pension as the investment grows in value.

Insurance bonds are the perfect solution. All you need is to invest, then sit back and watch it grow. After you have owned the bond for at least ten years, you can then withdraw part or all of the proceeds free of tax. However, you need to know that there is no obligation to take the money and you can as well leave it in the tax bond area for as long as you want.

In some ways, the insurance bonds are like superannuation. The funds will pay tax on behalf of the investor which means that there is no need to include the income in the investor’s yearly tax return. However, there are also differences that you need to know. Superannuation funds give tax on your behalf at 15% while insurance bond funds pay 30%. Another difference is that the amount of money you can place in superannuation is limited and your money is held up until you reach your retirement age which is at least 55 years. There is no loss of access when it comes to insurance bonds, and the amount you can place is limitless.

When it comes to insurance bonds Adelaide, the ability to access your money anytime is a major feature. Your money is not tied up for ten years, and you can withdraw all or part of it whenever you wish. However, if you take the money early, the profits will be taxable, but you will be entitled to a 30% rebate to compensate for the tax already paid by the fund.

Now when it comes to insurance bonds, you should always ensure that you are working with a reputable investment company. Not all companies can be trusted, and so you should do your homework before you commit your funds. If you fail to do research, you might end up being conned or working with the wrong people.