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Investing in (and for) Your Children

By Amy | August 6, 2007

j0409051.jpgMaybe you’ve been thinking about starting a college fund for your child, or perhaps you just want to put something away for your child’s future. You’ve got a lot of options, ranging anywhere from basic savings accounts, to savings bonds, to seemingly complicated 529 college-savings plans or even Roth IRAs. It’s a lot to comprehend, but thankfully there are a number of resources you can turn to for help and general information.

If you have a very young child, you may want to consider a 529 college-savings plan. You can open one of these for a child of any age and they can come with some pretty good tax benefits for contributors. Check out Find the Best 529 Plan from Kiplinger.com for more details on plans in your state.

There are some things that you should keep in mind when considering a 529 plan, however. Most importantly, your child must use the finds for college or pay a penalty. For more on this, read Kiplinger.com’s Avoid 529 Penalties.

Still want to know more about the 529? Read Everything You Need to Know About 529s.

Now, if you choose to go with just a basic savings account, for the sake of liquidity, be sure to take advantage of some of the high interest rate accounts out there. For a list of rates, use bankrate.com’s rate comparison tool.

Finally, you can start a Roth IRA for your child as long as they have some reportable earned income for the year. For more on the rules and regulations of opening a Roth for your child you can read Why Your Kids Need a Roth IRA and Roth Rules for Kids, both from Kiplinger.com.

Topics: Tips, FYI |

3 Responses to “Investing in (and for) Your Children”

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