Start saving for college with Northwestern Mutual

Ashley Temer is a Financial Representative with Northwestern Mutual who helps professionals, families, and business owners plan for financial security. She’s here for your “Money Minute.”

It’s never too soon to start planning a college savings strategy. You have several options and here’s what you need to know about the most popular ways to save.

The 529 Plan comes in two basic varieties. The tuition plan allows you to purchase college credits today that lockdown current tuition rates and are used in the future at a state school. With a college savings plan, you make contributions to the plan and chose from a variety of investment options. These have the potential to grow and compound for many years before you make withdrawals.

Coverdell education savings account, which is opened through a financial institution, permits withdrawals for any qualified expense such as tuition, books, uniforms, and supplies. Uniform Gift to Minors Act and Uniform Transfer to Minors Act is not specifically designed for college savings, but offer some unique qualities. The assets from the account can be used for anything. There are zero penalties for withdrawing funds for non-educational expenses.

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