Guide to Saving for College
There are several ways in which a family might save for their child's college education. 529 Savings Plans, Prepaid Tuition programs and simple savings accounts can all play a roll in paying for a student's college tuition. However, there is a further method to consider when saving for college, especially if you are in a position to plan ahead.
Treasury Bonds offer parents a low-risk, guaranteed yield way to save for their child's education. Treasury bonds are sold by banks and brokerage houses, and provide a safe investment opportunity for parents and families planning their children's financial futures.
Treasury bonds are different from standard savings bonds, in that their cost and yield is determined at auction. The price may be greater than, less than or equal to the face value of the bond. Two types of bids are accepted at auction:
Treasury Bonds are offered in two different formats, electronic and paper. Newer treasury bonds are issued in electronic format only, and are easy to track and manage through your bank or broker. Older bonds exist in paper form, and are easy to transfer to an electronic format to keep them in line with current standard practices. Paper bonds are no longer being issued, and all Treasury bonds are currently issued in an electronic format.
If you hold paper treasury bonds, you may wish to consider converting them to the electronic format to make them easier to manage. Treasury Direct can guide you through the step-by-step conversion process, the bare basics of which are as follows.
Treasury bonds offer a low-risk, guaranteed yield opportunity for parents saving money for their children's college. They offer many benefits, particularly to young families just beginning to save for the future.
Some salient points to keep in mind when considering Treasury Bonds for your child's education: