5 Ways to Start Saving for College

Brokerage Account

If you’re looking for more investment choices, another option would be to open a low-cost brokerage account through one of the many different companies that offer them. One of the differences between a 529 and a brokerage account is that investment options in a 529 are limited, while a brokerage account gives you a wide array of choices including stocks, bonds, mutual funds, and ETFs.

Keep in mind this is a taxable account, and you will have to pay taxes on capital gains and investment income. Make sure you do your research and know that the investment has been performing well for the last five years. Furthermore, capital gains from the previous year are considered when schools are evaluating financial aid decisions.