College

There are several college savings strategies, but they all fall under two broad categories:

• Lump-sum investment—When established early, this single payment approach makes the best use of compounded earnings.
• Periodic investments—Investing at regular intervals allows you to take advantage of dollar-cost averaging.

Once you determine your preferred funding method, the next step is to select the appropriate savings product.

• 529 Plans—529 college savings plans allow states to offer investors professionally managed, tax-advantaged portfolios.
• Education Savings Accounts—Allow parents, grandparents, friends and even children to save tax-free.
• Custodial Accounts—In addition to offering certain tax advantages, these accounts allow parents to control investment while the minor is the actual account owner.