Student Savings Account

Parents naturally want their children to have quality education and a better future. And with that, they invest on student savings account to fund their children's future college expenses. Parents or students can also obtain a special students savings account called 529 Education Plan Account.

529 Education Plan Account is based on a tuition program developed under Section 529 of the Internal Revenue Service. It allows the depositor to put on funds on the account without paying for penalties or taxes. And since it is a savings account, the deposits will also grow with interest.

The funds in 529 can be used for qualified educational expenses such as tuition fees, books, school supplies, pieces of equipment required for the studies and other expenses at accredited colleges, universities and also vocational schools. The funds can also be used for room and board expenses but exclusively available to beneficiaries who are half-time students. Interest expense on student loans and payment of principals are not qualified expenses under this fund. Advantages of the 529 plan include tax-deferred and tax-exempt features on the interests and distributions for the costs. Parents also hold the right over the account. Though the beneficiaries are the students, they will have no control over the funds.

Students themselves can also set up a student savings account on their own. If they have limited funds, they can still qualify to make a savings account. No longer will they have to put their stash of money in their piggy banks making it the appropriate time to get to a higher level: the real banks. Part of being an adult, young people should now start to build up their finances. For instance, young people below the age of 18 can avail of the Students Savings Account from First Federal. The account allows young people of this age to start their bank accounts with a minimum opening deposit of just $5.00.

There are no monthly fees charged and they can automatically upgrade their accounts to a regular savings account by the time they reach 19 years old. Under parental consent, depositors who are 17 years old or over may even have their own ATM card. The Students Savings Account option of the Bank of America is for students with limited funds. The minimum opening deposit is $100. Students get to also have their own ATM cards which can be used to over 18,000 Bank of America nationwide ATMs and through 5,800 banking centres. As of now (July 29, 2010), the annual percentage yield for this account is 0.10%.

These banks offer the features that students should be aware of when opening a student savings account. There should be low minimum balance requirement, though there are some who don't require any of this so students better shop around. Free ATM cards should also be readily available upon request of qualified depositors. Free access online to the accounts are also of major concern here so students won't have to hassle themselves going to banks or paying for fees to view their statements.