College Account For Baby

If you start saving for your 1 year old child s college today in a 529 plan you will have about in savings by the time your child is ready for college.

College account for baby.

Saving the same amount in the average savings account will only grow to which is less than using a 529 plan. If you choose to set money aside in a regular savings account you could be missing out on tax benefits on baby s college savings. You can find the right type of college savings account for your child by answering a few questions. There are several options each with unique sets of complex rules.

They are great savings vehicles with lots of flexibility and. Choosing the right college savings account for your child can seem overwhelming. Over the years i ve become a big fan of 529 college savings plans. Saving about 500 a month now earning 5 along the way.

They can also make contributions to an established 529 account under the child s parents name if the plan that the parents use accepts third party contributions. Once you have it you are able to set up a college savings account in your child s name. In nc 529 s case morgan says you can open an account for 25. Having said that there s a way to get started even sooner before your child is born.

If you re a grandparent godparent aunt or uncle considering a baby gift for a new parent then a college savings fund such as a 529 saving plan can be a practical gift for new parents. But making the right choice while your child is young even a baby can save you a lot of angst down the road when it comes time to apply for financial aid and search for scholarships. I set up two of them for my daughters one of whom is in college. Family members can contribute to a child s college savings by opening their own 529 plan accounts.

The important thing of course is to keep putting in money to your child s 529 every year and preferably every month. A dedicated 529 savings plan is one of the most tax beneficial and efficient ways to build a college fund for baby. Expecting college costs to continue growing say you want to cover 50 000 in annual college costs for four years when your baby turns 18.