Ans: Considering the investment horizon of a long term (minimum 5 years) for your child’s higher education, it is advised that you invest in large cap equity funds. Axis Bluechip Fund, Parag Parikh Long Term Equity Fund are a few of the given category that you may consider investing in.
Also question is, is a 529 the best way to save for college?
There are several ways to save for college, including 529 college savings plans, prepaid tuition plans and Coverdell education savings accounts. Of these, 529 plans are the best way to save for college. Start saving for college when the child is young. Aim to save about one third of future college costs.
Besides, how can I save for my child’s education?
8 Ways to Save for Your Child’s College Education
- Open a 529 plan.
- Put money into eligible savings bonds.
- Try a Coverdell Education Savings Account.
- Start a Roth IRA.
- Put money into a custodial account.
- Invest in mutual funds.
- Take out a permanent life insurance policy.
- Take out a home equity loan.
What’s better than a 529 plan?
Custodial UGMA and UTMA accounts can be used for purposes other than education. Roth IRAs have tax advantages similar to 529 plans and they don’t count as assets for financial aid purposes.
Can you lose money in a 529 plan?
False. You don’t lose unused money in a 529 plan. The money can still be used for post-secondary education, for another beneficiary who is a qualified family member such as younger siblings, nieces, nephews, or grandchildren, or even for yourself.
What is the best account to open for a child?
- Best overall savings account for kids: Capital One. …
- Best savings account for college savings: Citizens Bank. …
- Best savings account for a young child: PNC Bank. …
- Best savings account for teens: Alliant Credit Union. …
- Best APY for a kid’s savings account: Spectrum Credit Union.
How can I make money at age 11?
10 Ways for Preteens to Make Money This Summer
- Work as a ‘mommy’s helper’ In the past, middle-school-age baby sitters were the norm. …
- Help a local senior. This was actually one of my earliest jobs. …
- Open a lemonade stand. Ah, a lemonade stand. …
- Do yard work. …
- Walk dogs. …
- Pet sit. …
- Provide tech support. …
- Wash cars.
What happens to 529 if child does not go to college?
If assets in a 529 are used for something other than qualified education expenses, you’ll have to pay both federal income taxes and a 10 percent penalty on the earnings. (An interesting side note is that if the beneficiary gets a full scholarship to college, the penalty for taking the cash is waived.)
How much money should I save for my child?
Fidelity recommends you multiply your child’s age by $2,000 to figure out how much you should save. A tax-advantaged 529 plan can boost your college savings. The average 529 plan investor has more than $32,600 in their account when their scholar reaches age 17.
How much money should I save for my child’s college?
We call it the “college savings 2K rule of thumb.” Simply multiply your child’s current age by $2,000 for the amount you should have in college savings by that age. This figure can show you whether your college savings to date are generally on track to cover 50% of the cost of attending a 4-year public college.