Alternate Ways to Gift Money to Grandkids

Looking for unique ways to support your grandkids financially? When it comes to gifting money to your grandkids, thinking outside the box can provide them with not only financial support, but also valuable lessons in money management. Here are some creative methods to consider:

Greenlight

PSECU has partnered with Greenlight, a banking¹ app and debit card for kids and teens (issued by Community Federal Savings Bank, Member FDIC), which equips parents with tools to help kids develop smart money skills in a fun, unique way. Managed by parents, Greenlight allows you to transfer money directly to your grandkids’ Greenlight accounts. With the Greenlight debit card, parents can set controls and monitor kids’ spending, and kids get a hands-on way of learning about money management. It’s a great way to teach financial literacy to kids at a young age.

Greenlight is free² for PSECU members. Enroll today!

Youth Savings Accounts

Opening a youth savings account is a great way to gift money while instilling savings habits at a young age. PSECU offers two youth savings accounts for kids under age 18 - regular savings and custodial accounts. These accounts are designed to grow with the child, providing a safe place to accumulate savings over time. Both types of accounts qualify for a special youth savings rate, which is available for accounts that are opened for or owned by children under age 18. Youth savings accounts will earn 4.00% Annual Percentage Yield (APY)³ on youth account balances up to $500. For balances of $500.01 and over, the Regular savings share APY will apply. Likewise, when the youth turns age 18, the rate will change to the current Regular savings share rate.

• Regular Account: Kids aged 13 and over can open a regular account. An adult can serve as joint owner of the regular account until the child reaches age 18. Both the youth and joint owners are eligible for PSECU debit cards in their own names.
• Custodial Account: Kids must meet PSECU membership eligibility requirements to get a custodial account, but the custodian doesn’t need to be eligible to join. For a custodial account, only the custodian can withdraw money from the account. Custodial accounts can remain open until the youth turns 21; however, the higher-yield savings rate will expire once the youth turns 18.

Both of these account options are savings shares that require a minimum $5 share balance.

529 College Savings Plans

If you’re thinking long-term, consider contributing to a 529 college savings plan. These plans are tax-free investment accounts designed specifically to help you save for future education expenses. By starting early, you can make a significant impact on your grandkids’ ability to afford college without accruing massive student debt.

Named after Section 529 of the IRS code, these plans are sponsored by state governments, state agencies, or educational institutions. Plans are sponsored by states and each state, including Washington, D.C., offers at least one plan. In Pennsylvania, the state-sponsored 529 plan is known as PA 529. 

The PA 529 plan offers two different savings plans to choose from:

• Guaranteed Savings Plan (GSP): Lock in today’s tuition rates to pay for tomorrow’s education. The account owner or beneficiary must be a PA resident. When you open a GSP, you can select a tuition level, such as private colleges or state schools. You’ll then be told how much you need to save based on the tuition level you choose. You have the option of changing the level in the future. One drawback to GSP is that not every school is covered by the plan. If your grandchild decides to go to a school that doesn’t participate in the plan, it can affect the value of your savings.

• Investment Plan (IP): With the PA 529 IP, you can customize your investment options to help grow your grandchild’s savings over time. The value of the savings isn’t connected to the school your child decides to attend when you choose your investment option. Like most types of investments, there is a chance your account will lose value based on how the market performs.

Both options allow your grandkid to use their savings for a variety of education expenses at numerous colleges, universities, vocational and technical schools, and more. If they decide not to pursue a path of higher education, you may choose to update the beneficiary to your other grandchildren.

Charitable Giving in Their Name

Consider making a charitable donation in your grandkid’s name. This method not only supports their financial future but instills values of community support. Some charities even offer certificates or acknowledgements that can be a meaningful gift to your grandkids.

Gifting money to your grandkids doesn’t have to be a straightforward cash handout. Each of these methods offers a unique blend of support and education, ensuring that their gift has a lasting impression.

For more fun gift ideas or articles on other financial topics, check out our Resources Center.

¹Greenlight is a financial technology company, not a bank. The Greenlight app facilitates banking services through Community Federal Savings Bank (CFSB), Member FDIC. 

² PSECU members are eligible for the Greenlight SELECT plan at no cost when they connect their NCUA-insured PSECU checking account as the Greenlight funding source for the entirety of the promotion. PSECU debit cards are not eligible for this promotion. Subject to minimum balance requirements and identity verification. Upgrades will result in additional fees. Upon termination of promotion, customers will be responsible for associated monthly fees.  See terms for details.  Offer ends 7/30/2025. Offer subject to change and partner participation.     

³APY denotes Annual Percentage Yield. To be eligible for the Youth Savings rate, the primary account owner must be under the age of 18. All eligible Youth Savings Share accounts earn 4.00% APY for balances of $.01 to $500.00. For balances of $500.01 and over, the Regular Savings Share APY will apply. Rates and information are subject to change at any time. Fees could reduce earnings on the account(s). The disclosed dividend rates are variable and may change after the member opens the account(s). Find our current dividend rates at psecu.com/rates. PSECU requires a $5 minimum balance to open and maintain a Regular share account. This $5 share account deposit is also required to be eligible to receive the Youth Savings rate, and the member must be in good standing as defined by PSECU's Bylaws, Article II, Section I. PSECU will make a $5 minimum share purchase on behalf of the member.