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By FinanceBuddy Staff Writer
One of the most popular options available for a college savings plan is the 529 plan, which is a state run plan that helps people save for college. Many people also choose to start their own high-interest savings account or use traditional investment methods to save for college, such as CDs and mutual funds. 529 plans are very popular because often a state or institution will apply money from their own budget to your college savings fund; some will match your contribution to the savings fund up to a certain amount. A contribution from a government organization can be very helpful in saving for college. There are college-based CDs available from many banking institutions. These CDs are designed as an investment to help you save for college. Some institutions offer high-yield options for future students who wish to use their CDs to save for college. Mutual funds are another way that you can use traditional investment options in order to save for college. Mutual funds are often offered by banking institutions under a special program to help students save for college by offering a higher rate of interest with a break on taxes. Even though students over 18 are supposed to pay taxes on their interest income, there are special plans available to hold off the taxation of the interest income on a mutual fund until the student who is saving for college is over 24 years old. This can be a big savings on your taxes, allowing you to save more for college. Whether you choose to use mutual funds, CDs, a savings account or the 529 program to save for college, it is a good idea to start as early as you can in the process. If you have access to incoming funds, the earlier it is in your college saving process, the more risks you can take with respect to the stability of your particular college saving method.