In the United States, college fees are extremely high with a big expenditure on the part of the parents. But at the same time, they are an investment for your child’s future. People who have a better educational background earn and live a better life with better amenities and money to support their own families.
If you are a new parent, it is best to start investing in your child’s education from today itself to make sure that you have saved enough money for your child’s education. Among many plans, 529 plans are a good option to invest your money.
The 529 plan is a state-operated savings plan, which has various benefits such as tax-exemption on the capital amount. The plan was introduced by Congress and is also known as qualified tuition programs (QTPs). Introduced in 1996, it is one of the popular investment plans offered by all the states in the country.
Every state offers differ plans to its citizens, but there are two major divisions offered by all the states.
- College saving plans
- Prepaid tuition plans
529 plan offers are exempted from federal taxes even in the case of withdrawals, as long as the withdrawals are towards paying college fees of your child. So, of you are planning to invest in college funds 529 plans are a viable option.