529 College

College Savings Accounts For Your Children's Future

Worried about how you are going to fund your child's education in the future? Are you stressed out by the soaring costs of higher education? Well then start saving. Your planning today can ultimately secure your child's future. And today you have loads of College saving accounts at your disposal. Life could not really be simpler. All it takes is a little bit of research and thorough planning.

Still confused? Then consider the following:

Investment Account in Parent's name - This is a taxable college savings account. Federal taxes that are 15% apply to this account's investments and even on the dividends. There is no criterion in terms of eligibility. Anyone can start such an account. An unlimited amount can be invested and the assets can be allocated in whatever way you like. The usage of the withdrawals is also upon the account owner. This account is best suited for parents who are looking for maximum flexibility. Its ideal for those who are not sure whether they want to send on their child's education or even have doubts as to weather their child is going to attend college at all.

529 College Savings Account: Here your savings grow tax free. 10% penalty is levied if you use the money for anything else but higher education expenses. There are no taxes on withdrawals also. The penalty is excused if the child receives a scholarship or if the child dies. For most state plans anyone is eligible put some plans require the contributor to be a resident of the state to which the plan belongs. The ceiling for contribution is $12000. This college savings account can be invested only in the mutual funds provided in the plan. There is also an option to change the beneficiary. This account is best suited for parents who have made up their mind to invest substantially and want to have tax free savings for their child's higher education.

Crummy Trust: This college savings account is for those parents who want to transfer the funds to their child to evade taxes but are not comfortable with the idea of handling the complete control to them once they reach the age of majority. There are no tax benefits here and the taxes are levied as usual. Anyone is eligible for this account. There is no limit as to how much you can contribute. You can allocate the assets in whatever manner you want. But there is no option to change beneficiaries.

Apart from these one can also look into the custodial and Coverdell college savings account. But the past college savings account and the most popular one is the 529 College account. Especially when it come to saving for college education.