I want to open a $12K CD for my kids in my Ally account as it currently has the highest interest. It will likely be used to help them buy a car when they turn 16. When I open a CD it's asking me what Account Types this will be: individual, joint, custodial, trust.
I originally was thinking custodial as, I believe, it's taxed under kids, seperately from our (adult) income, so tax rate is much lower. But I also know that, for example, UTMA custodial account can create some problems with FAFSA (financial aid for college) as it's looked at as child's asset. But I also think that parents' assets are also looked at when it comes to FASFA... I'm not sure. Is it only a concern with UTMA specificly or any custodial account?
Side note, I do have 529 account for them too.
What account would be best?