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Savings Plan for Grandchild

By Terry Savage on July 17, 2021 | College Savings / Student Loans

I want to start a savings/investment plan for my grandchild (6 months old). Something that can be used for education or non-education purposes. I am not looking for an education specific investment. What would you suggest?

Terry Says

First of all, money in a “custodial” account (vs a 529 savings account) weighs 7x more heavily in the financial aid formula if the family needs to file for financial aid for college.
Second of all, at the age of majority (18 in most states) the money becomes the property of the teenager! (Need I say more?)
The best thing you can do is open a 529 college savings plan account where themoney will grow tax-free for college in the future.
Read this column, or several others on 529 plans by searching my columns at TerrySavage.com.

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