Setting Up Savings Account for Child
Hi,
My son is 3 years old and I want to start a savings account for him. I can’t add much, but want to add a bit per month as I try to save up for him. I am trying to find the best bank/account with the highest rate to move money into. Where can I find the highest rate?
Terry Says
Oh no, you’re going about this all the wrong way! I think you will want your child to have a college education, and the best way to save for that is to open a 529 College Savings Plan, where the money will grow tax-free for college expenses.
Please read this column, explaining how they work:
https://www.terrysavage.com/the-gift-of-college-529-plans/
Encourage grandparents and family friends to contribute as well.
If you live in Illinois, you should use the BrightStart plan, because you can deduct up to $10,000 of contributions from state income taxes.
If you live elsewhere, and your state doesn’t offer a deduction for contributions, then just go to Vanguard or Fidelity to open your 529 plan.
