By Charlotte Gerber 
It is never too early to begin saving for your child’s education. In fact, the earlier you begin saving the more you will earn in compound interest. Surprisingly, a minimum investment of $500 in a high yield savings account when your child is one can net as much as $20,000 by the time he or she is ready for college.
There are many ways to invest in your child’s future no matter how old they are. Investment accounts that balance both high and low risk stocks can help you grow a nice little nest egg when your child is young. If your child is closer to ten years old consider purchasing stock that is considered a higher risk so that you may earn a higher return on your investment in the least amount of time. The downside of investing in stocks is that the market determines how much of a return you will earn on your investment.
Many people forget about savings bonds. These are still an ideal way to save for your child’s education if you are planning well in advance. Series EE bonds mature in ten years. Consider purchasing a fifty-dollar savings bond each time you are paid from work for twenty-five dollars. These bonds can go a long way in paying for the high price of textbooks and housing for your future college student.
Other long-term investment options include education IRAs or bank CDs. The return on these investments varies according to the prime rate. These types of investment are especially good for people that have a hard time saving money since there is a penalty for early withdrawal.
Finally, there are some states that offer the option of purchasing education credits. The benefit to purchasing these is that no matter how high tuition rises you will be paying today’s rate for them. It is speculated that tuition costs will more than double over the next ten years. The down side to purchasing education credits is that they are only good in the states that they were purchased in. If your child decides to go to an out of state school you will have to cash the credits in and you will not have earned a return on the investment.
Don’t wait until your child is filling out college applications to worry about funding their education. You don’t want to have to mortgage your house to pay their tuition. Check with your local bank officer to find out how you can start saving today for your child’s future.
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