Anyone who knows someone with a new baby, a Baptism, a Bar or Bat Mitzvah, or a middle school graduation, can give that child the gift of a lifetime: a savings plan that will bring them to college. TrustEgg is a product that allows an account to be set up for anyone under age 18 and with even $1, kickstart their future.
While TrustEgg cannot guarantee a return rate, the fund they use has averaged about 8 percent a year since its inception in 1929. TrustEgg uses social media to encourage family and friends to contribute online so that the child will have a nest egg by the time they graduate from high school.
Launched in February 2013, Jeff Brice, CEO and founder of TrustEgg, was working as an accountant in a bank when he had the concept of creating a savings program for children to use when they turn 18. The program aids families to develop automated online trust accounts within just a few minutes, with no minimum investment.
There are no upfront fees and the account can be established any time before the child turns 18, with the trust company as the custodian. All you need is a social security number and a driver’s license for the person setting it up and a social security number for the child. If parents do not have a social security number, a friend or relative can set up the account on behalf of the child.
After establishing an account, a dashboard is created whereby the person initiating it can then set up accounts for additional children and view all contributions in one place. Brice explains that because TrustEgg is not a college savings plan, but rather a trust fund, it could be used for a down payment on a house or at the child’s discretion. As Brice notes, the earlier one starts saving, the better.
For this reason, it can work in conjunction with a 529 college plan. That is, there is no legal conflict if a child has both plans. Eventually a calculator will be added to the site so that those making investments will be able to adjust contributions for different end savings goals and to see how their contributions are growing.
TrustEgg is a technology provider. Its trust product is offered by Summit Trust Company. Investments are made into one mutual fund – Vanguard Wellington Fund – to facilitate the process for family members, especially those without sophisticated financial knowledge. Brice and TrustEgg advisor, Martin Ganda, say the idea is not to beat the market, but to provide a simplified method for people to save money to secure a child’s future, for graduation and beyond.
Brice and Ganda say that aside from its simplicity, the beauty of the program is that family and friends can contribute to the account through Facebook, Twitter, or through an emailed link. What could be a more satisfying way to give a graduation gift than to provide a savings plan for life?
Last month a ground-breaking strategic partnership was launched between TrustEgg and the National Black Church Initiative (NBCI). NBCI is a faith-based coalition that includes 34,000 churches comprising 15 denominations and nearly 16 million African Americans. The TrustEgg product fits neatly into NBCI’s program of assisting families to establish financial security. This collaboration will be discussed further in the next article.
Graduation is around the corner and end-of-year gifts can be turned into a savings plan to improve a child’s lot in life. Since bank savings accounts today accrue about 0.06 percent annual percentage yield (APY), or interest, a TrustEgg contribution with its 8 percent rate is very attractive. For the next occasion, rather than handing a child cash or a check, family and friends might consider something that lasts a bit longer.
Opinion by Fern Remedi-Brown
Personal communication with Jeff Brice, CEO and Founder and Martin Ganda, Advisor, TrustEgg
Personal communication with Rev. Anthony Evans, President of the National Black Church Initiative