College Savings Strategies

Investment Vehicles Designed for Education

There are a number of choices available for these seeking tax-efficient accounts specific education. These include the

TD Ameritrade 529 College Savings Plan, Covered Education Savings accounts, and UGMA/UTMA Custodial accounts.

529 Plans

Sponsored by individual states, these college savings plans offer a level of flexibility and potential tax advantages that can make them a great choice for the right investor. Benefits of a 529 plan vary from state to state. Details of the TD America 529 College Savings Plan include :

  • The account owner maintains control over the account even if the beneficiary decides not to go to college
  • Allocate assets based on risk tolerance or child’s age
  • Contribute $400,000 in a lifetime per beneficiary
  • Contribution and earnings grow federal tax-deferred and funds withdrawn for qualified higher education expenses are completely free from federal income taxes
  • Some states may offer tax benefits to in-state residents
  • Invest as much as $15,000 per year per child, or $75,000 in a single year, without incurring federal gift taxes.

Learn more about the TD Ameritrade 529 College Savings Plan’s benefits and choices available to you as a TD Ameritrade client.

Coverdell Education Savings Account

These accounts offer federal tax-free earnings and withdrawn on qualified expenses such as tuition, books, computers, and room & board. While 529 Plans are used exclusively for college. Coverdell Education Savings Accounts (ESAs) can be used for elementary and secondary schooling in addition to college. Additionally, there are no minimum contribution and account owners can contribute up to $2,000 per child per year. See if Coverdell ESAs are right for you by exploring more account details.

UGMA/UTMA Custodial Accounts

Custodial accounts provide a way to build assets for your children or loved ones future, and let you manage a minor’s assets for their benefit. As you build a portfolio, with or without assets form the minor, you will be the guardian of the account, managing it until the minor reaches the age of majority. From the start, the account will be held under the minor’s name and Social Number. Once the are old enough they will assume control of all assets.