Difficulty:
Very Easy
Average rating:
Here is how to open a college savings account for college and make sure that it's the best account for your needs.
Getting a good education can be expensive, and having to take out student loans can lead to you starting out right after college with quite a bit of debt. Any money that you can put aside beforehand will help you reduce the amount that you need to borrow, and will also help cover your expenses if you miscalculate your loan amount and borrow too little. One of the best ways to save money for college is to open a savings account specifically for that purpose. In order to get the most out of your college savings account, it's important that you take the time to find the best account for your needs. Here is what you need to do to make sure that you won't accidentally pass up the savings account that's right for you.
Step 1:

Start shopping around for a savings account for college as early as possible. Whether you are looking for an account to help cover your own college expenses or you are hoping to help your child save money so that they can go to a good university, the longer the money has to grow then the better the balance will be when the money is needed.

Step 2:

Visit banks where you have done business before and ask for interest rate quotes on savings accounts. If the bank offers special rates for college savings accounts, make sure that you get a quote for those rates in addition to their rates for standard savings.

Step 3:

Take the time to visit additional banks and request savings account interest rate quotes from them as well. While you may be able to get a better rate from a bank that you have a history with, this isn't guaranteed. Collecting quotes from a number of different banks ensures that you aren't going to miss out on a better interest rate simply because you didn't think to shop around.

Step 4:

Compare the interest rate quotes that you've received from the various banks that you visited. Look for the savings account that features the highest interest rate, making sure to avoid accounts which feature unfavorable terms. Don't choose an account with options that you dislike simply because it has the highest interest rate. Keep the second and third highest rate quotes available until you've opened your college savings account just in case something causes you to not open the account that you've chosen as your first pick.

Step 5:

Visit the bank that offered you the best interest rate for your college savings account and tell them that you'd like to open a new account. You will most likely have to talk to an account specialist who will open the account for you. In order to open the account you will need a state-issued photo ID (such as a driver's license), and may need your Social Security card and a copy of your birth certificate as well. (Though if opening an account for a child you will need their Social Security card and birth certificate instead.) You will also need to have money for the initial deposit; this can vary anywhere between $50 and $500 depending on the bank and the specific terms of your account. Answer any questions that the account specialist might have honestly, then sign the signature card presented to you in order to give the bank a signature reference for deposits and withdrawals.

Step 6:

Watch your mail for the ATM card and PIN for your college savings account. They will likely be mailed separately for security purposes; depending on the bank you may have been able to create your own PIN or you might have a random number generated for you. The account's ATM card and PIN should arrive within 5-10 business days from when the account was created.

Step 7:

Continue to make deposits into the college savings account whenever possible. Save change until it can be rolled, designate a specific amount from each paycheck, or find similar methods of getting money to place into the account. In order to help ensure as much money is available as possible to pay for college or a university education, try to make at least one deposit every 2-4 weeks. Even small deposits will add up over time, and the interest paid to the account will help those deposits to grow even more.

One of the most important things to remember about a college savings account is that the money in it is supposed to pay for your or your child's education. Avoid the temptation to make withdrawals from the account with the intention to pay them back later; to make a savings account for college truly effective you should keep putting money into it but not take any out until it's time to pay toward a college or university tuition.

Be the First to Comment on this Article