There are different ways to save money for your child’s future depending on what type of financial objectives need to be fulfilled. Federal Credit Unions are great ways to begin that process. They have low fees, great service, and a sole purpose to serve its members. Since they are not for profit, their focus is on supporting both their members and the community. It’s best to open a new account for a child in a parents’ name so the child won’t have too many assets when college financial aid forms need to be filled out.
If college is the main reason for saving, then opening a 529 college savings plan will allow parents to save for college tax free. Similar to an IRA, monies deposited are invested and can be used only for education. When the money is used for qualified tuition expenses, taxes don’t have to be paid. If the child doesn’t go to college, the beneficiary of the account can be changed.
