3. Saving
b. Compare savings options
When comparing college savings vehicles, there are many features and options to consider. Here are a few things to think about before you dive in to a college savings plan:
- How convenient and accessible do you want your money for college to be?
- What are the minimum and maximum deposit levels?
- What are the balance requirements?
- Are there penalties for early or non-qualified withdrawals?
- Who will own the account – the person going to college or the person contributing the money?
- Are there fees for transferring money to other accounts?
- Are there service charges?
There are several different types of accounts that individuals and families often use for college savings. These are the most common:
- 529 College Savings Plans
- Uniform Trust/Gift to Minors Act Account (UTMA/UGMA)
- Coverdell Education Savings Account
- Roth IRA or 401(k)
- U.S. Savings Bonds
- Taxable Accounts
Check out our
college savings options comparison chart for more information.