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I just got a letter today from American Century stating that my original agreement had been ammended so that the automatic investment plan for the UTMA I had set up fro my daughter is no longer in force, and that it won't be granfathered. Meet the fund min of 2500 (only have $1400 in it $50 a month) or close the account. Well I don't have the min and I have no idea where to put it now......doesn't anyone support building funds like this anymore ? I'm thinking I can put it directly into a 529 in Washington State, but the idea was money if she did /did NOT decide to go to college either way ,I learned from having sisters, girls cost dad money :)
Regards,
Mike
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I just got a letter today from American Century stating that my original agreement had been ammended so that the automatic investment plan for the UTMA I had set up fro my daughter is no longer in force, and that it won't be granfathered. Meet the fund min of 2500 (only have $1400 in it $50 a month) or close the account. Well I don't have the min and I have no idea where to put it now......doesn't anyone support building funds like this anymore ? I'm thinking I can put it directly into a 529 in Washington State, but the idea was money if she did /did NOT decide to go to college either way ,I learned from having sisters, girls cost dad money :)


Hi Mike,

My general observation is that in the current market environment a lot of fund providers, brokers, and Internet financial web sites have had to reassess their business models in order to stay in business.

Unfortunately, this generally leads to increased fees and increased minimum account requirements.

Have you tried Vanguard?
http://victory.vanguard.com/cgi-bin/NewsPrint/968683054

I think many of their accounts at least used to require just a $1000 minimum for a UTMA.

Keith O'Malley
TMF KGOMalley
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Well I don't have the min and I have no idea where to put it now......doesn't anyone support building funds like this anymore ?

There are lots of ways to continue saving $50 a month and having it grow for your daughter. You might look at sharebuilder.com or buyandhold.com for example. You will have to pick up higher transactions fees there, but you will be able to choose from a variety of exchange-traded index funds such as SPY. You can also set up a DRIP into a specific stock.

Double-check your records to be sure how much you've actually invested in the account. American Century evaluates whether accounts meet the minimum by the amount invested instead of the current value. If you've invested more than $2500, you shouldn't be swept, even if your current value is $1400.

Most companies do not support the "$50 a month" minimum anymore. Too many people ended up using their investment accounts like savings accounts -- a few bucks in, a few bucks out -- which increases the expenses of the fund company exponentially. It just hasn't worked out to be a good model. If you can, you might try using a savings account to save up the other $1100 to meet the minimum.

Most of all, it would be nice to find a way to hang on to your shares at American Century until they recover somewhat.

- KK

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T. Rowe Price still has their $50 automatic asset builder program that you could switch to. Of course, selling your child's current fund would trigger gains taxes if the gains were over $750 for this calendar year.

Other ideas: investigate buying separate securities and creating your own mutual fund via DRiPs. (dividend reinvestment plans). There are two active boards here at TMF regarding DRiPs: Drip Investing Basics and Drip Investing Companies; to get there just type the name in the Board box below.

good luck,
Jenn
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Just so you are clear:

You can NOT put the money in a 529. That allows you to control money beyond majority and if your child does ott go to college you could potentially spend the money on someone else.

You must put the monwy in the same UGMA/UTMA you had in the first place. If absolutely necessary it could be a bank account, although from other posts it sounds like that is not necessary and some fund companies will allow a $1400 deposit. But you cannot create any account which would tie up the money beyond ge 18 (21 in some states) or which allows a possibility that you could get the money back or it go to some third person.

dennis
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