What's the best way to build up a new born's college fund? My wife and I had our first child 7 weeks ago. We'e going to set aside money every paycheck from now on to put into our baby's college fund. Initially, I was just going to open up a savings account under our daughter's name, but I researched more and found other options that have tax benefits and whatnot. We plan on having more kids if that matters at all. We don't plan to touch the funds at all until college time. However, I prefer flexibility just in case life's anomalies decide to show up. I know there are options that have the tax benefits, but the saved funds are required tongo towards higher education. Again, I have no problem with that right now, but what if our child decides to not go to college for whatever reason? I know the funds can be transferred to a sibling's name, but what if none of our kids ever go to college? Those finds are accessible with penalties. I also don't want to mess up the kid(s)(') chances at scholarships, which some savings options would help in that regard. I thought it was clear as day as far as how we were going tonsave for college. But there are a bunch of options that seem way better than our original plans. Any advice is much appreciated!
I should also mention that I'm not a fan of savings options that are greatly impacted by a down market or market crash. If rather it be low risk, low reward with high reward as a possibility when it comes I saving for our kids' college expenses
We just opened one up for our son. You should open up a 529 plan. When the baby gets to college age any profit made on the account won't be taxed. Our advisor told us the three types of funds you could invest in and ultimately we just went with an index fund. Apparently each state has different "plans", but being from Texas you can choose the plan from any other state. I'm no expert on the subject and wouldn't know the first thing about doing this on my own. We just met with our advisor at Fidelity and they walked us through it. Good luck!
