What are Types of Savings Vehicles?
Traditional Bank Services
- Include savings accounts, money market accounts and certificates of
deposit
- Fees may be charged for some bank services
- Deposits are federal insured up to $100,000 and almost without risk
- Rates of return may be less than with other investment vehicles
U.S. Savings Bonds
- Purchased from banks, through payroll deduction or directly from the
U.S. Treasury
- Exempt from local and state taxes
- Bond earnings can also be free from federal taxes if the bonds are
used to fund education
Mutual Funds
- Managed portfolio of securities: stocks, bonds, money market funds
or a combination
- There are many mutual fund options for different growth or income objectives,
investment time frames and levels of risk
- Provide greater risk than traditional bank services but have potential
for greater return
Stocks
- Offer investors potential for long term investment growth and income
- Available through brokerage firms - trading fees are based on purchase
and sale of stocks and whether the broker provides investment advice
or is a "discount broker" who only transacts trades
Zero Coupon Bonds
- Available from brokerage firms, purchased at a "discount" from the
face value
- "Zeros" are redeemed later at face value or upon maturity
- Investors know what the investment will be worth and can time the maturity
to coincide with college
Value can fluctuate with market changes and there may be a loss/gain if redeemed
before maturity.
Tax Cuts
for Higher Education ->
Early College Planning
Seminar Presentation
 529
Plan Evaluator - Savings for College
Coverdell
- Saving For College
FAQ's
About Savings Bonds
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