Let's face it: one of the greatest gifts that college students can receive is money. With the expenses that they have for their higher education, helping them financially is the perfect gift for this holiday season.
U.S. News shared the story of Lloyd Gurley, who puts money into his two grandsons' college savings accounts. "It is the Christmas season, and that is a good time to provide that," he said.
Gurley deposits the money directly into the two North Carolina 529 accounts that he owns. A 529 account is a college savings account which allows the money in it to grow tax-deferred. It will also enable the money to be taken out tax-free if it is to be used for qualified education expenses.
A study by Fidelity Investments found that majority of parents actually welcome college contributions in place of traditional presents from family and friends. It was also revealed that an average of $658 is spent per child on gifts.
Giving money the time to grow through interest in the bank would make your gift go a long way. The publication shared four ways to give money for a child's college education.
1. Gift Cards
Retail companies like Toys R Us and Babies R Us across the U.S. are selling gift cards that can be linked to the receiver's college savings account. The program is offered by giftofcollege.com, which is an online registry for gifts to 529 plan accounts.
2. 529 Websites
There are some 529 plans which allow users to create customized webpages with media that contain information about themselves. Family and friends can then use the website to contribute directly to a recipient's college savings account.
3. U.S. Savings Bonds
Savings bonds are another option. Today, they can be bought through the TreasuryDirect website. U.S. savings such as the series EE and the series I can be redeemed tax-free for qualified higher education expenses.
4. Cash or Checks
You can also go the straightforward, classic way of giving money through cash or checks. This way, parents and their children can check for the type of savings account that works for them.
