When savings accounts have accumulated a significant amount of money, parents may want to consider moving the money to higher return vehicles like money markets, certificates of deposit, or mutual funds. When establishing investment accounts for children, consider carefully how you want the account registered. If you choose to have the account in your own name, you will be responsible for taxes on the account. You also retain complete control over the account for as long as you want. With UGMAs, funds in the account are in the minor's name and Social Security number and are considered to be owned by the minor.
Dividends paid on the account are taxable, most likely at a preferred tax rate.
The adult custodian is responsible for the account until the minor reaches the age of majority, which is 18 in most states. At that time, control of the account reverts to the child. When choosing an account to save or invest in, it is important to consider how soon you will need the money and what restrictions may be placed on withdrawing it. If the mission is fewer than 24 months away, parents and prospective missionaries may want to place savings or investments in insured accounts from which funds can be easily withdrawn as needed.