College Account For Baby

Once you have it you are able to set up a college savings account in your child s name.

College account for baby.

Give yourself a refresher on financial aid lingo. There are several options each with unique sets of complex rules. You can find the right type of college savings account for your child by answering a few questions. I set up two of them for my daughters one of whom is in college.

Choosing the right college savings account for your child can seem overwhelming. 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. 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. Having said that there s a way to get started even sooner before your child is born.

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. 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. 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.

In nc 529 s case morgan says you can open an account for 25. You re giving your child a head start in life no matter what your child s future brings. Saving the same amount in the average savings account will only grow to which is less than using a 529 plan. A dedicated 529 savings plan is one of the most tax beneficial and efficient ways to build a college fund for baby.

The important thing of course is to keep putting in money to your child s 529 every year and preferably every month. They are great savings vehicles with lots of flexibility and. Family members can contribute to a child s college savings by opening their own 529 plan accounts.