Compare three ways that families can set aside savings for education.
Most financial institutions across the country offer two U.S. government programs that allow adults to set aside savings for their children or grandchildren’s education. The first is called an Education Savings Account. The second program is called a 529 Plan, and there are two basic types.
Both Education Savings Accounts and State-Sponsored College Savings Plans are different than regular savings accounts. The account holder is actually placing money into investments. Instead of earning interest on their deposits, they make a profit if their investments go up in value.
A pre-paid tuition plan allows a person to pay for tuition in advance at today’s rates. That can save money since the cost of tuition can frequently go up.
Click the Next button to explore another source of education money: grants and scholarships.