Ask Terry Questions Best option for inheritance left to child

Best option for inheritance left to child

By Terry Savage on July 07, 2022 | College Savings / Student Loans

My uncle recently passed and left my son (age 11) and daughter (age 9) $5000 each. His desire was for them to use for college. What’s the best option for this money? Should we get a cd? Treasury bond? Regular savings account? Trying to find the best yield for about a 10 year span…..thank you for your help.

Terry Says

I think given their ages that you should put this money in a 529 College Savings Plan, where it will grow tax-free for college. They won’t need it for about 10 years, which should be plenty of time. You can read this article for background information, and then go to www.SavingforCollege.com to find a plan. If you are in Illinois you should go to www.BrightStart.com, where Illinois residents get a deduction on state income taxes for using the Illinois plan.

f you keep the money in a custodial account at a bank or mutual fund it will weigh more heavily against the family in the financial aid needs analysis. Not so with a 529 plan.

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