Other Ways to Save
If the beneficiary of college savings accounts will be enrolling within five years, you may want to concentrate on putting money into:
- Traditional savings accounts
- Money market accounts
- Certificates of deposit (CDs)
The downside is that you probably won't see much growth because the interest rate these accounts pay is less than you have the potential to earn on investments like stocks and mutual funds.
But the upside is that your money is insured if it is in an FDIC bank or insured credit union. This means you'll never have less than the amount you deposited. That's not always the case with investments.
You might also consider education loyalty and affinity programs to supplement your savings. You may be able to increase your college savings by:
- Shopping at certain stores
- Buying particular products
- Using a designated credit or debit card
A program you might want to investigate is Upromise.
Save at least part of your summer job and after-school earnings in an insured bank account to help you pay for extra expenses while you're taking classes.