The primary goal here is not your kid; it's to increase liquidity of the investment manager involved, usually designated banks. They take your funds and lend them out to new borrowers to make more money. Your money and the government's $1,000 sits, and gets some potential gains, but overall it's no different than putting money in a Gov Bond or Roth IRA. In this case, you have to lock it up until set date, but the same thing happens with retirement accounts. In the meantime, inflation eats away at everything. So, the real math here is, how much net profit do you make for free with your government $1,000 by the time it's accessible, versus what you could have done with the money you invest elsewhere instead...At best, you'll probably end up with a free $300 after inflation effects over time.
The primary goal here is not your kid; it's to increase liquidity of the investment manager involved, usually designated banks. They take your funds and lend them out to new borrowers to make more money. Your money and the government's $1,000 sits, and gets some potential gains, but overall it's no different than putting money in a Gov Bond or Roth IRA. In this case, you have to lock it up until set date, but the same thing happens with retirement accounts. In the meantime, inflation eats away at everything. So, the real math here is, how much net profit do you make for free with your government $1,000 by the time it's accessible, versus what you could have done with the money you invest elsewhere instead...At best, you'll probably end up with a free $300 after inflation effects over time.