Often 529 college savings plans have no cap to what you can put into them. In some states you can save as much as $300,000 during the life of the plan. Not only will you have enough for sending your student off to college but you will also have enough for them to continue on to graduate school.
Saving for college for your child with a 529 plan is easy to start when the child is born. Just fill out a few forms and set up a monthly withdrawal from your bank account and you are done. Some parents are so excited about saving for college that they start saving for the child even before it is born. The plan has to have a beneficiary when started, so parents just put their own names and later switch it to their child's name after birth.
Thanks to Uncle Sam's fine idea of structuring 529 plans to be tax efficient you will never have to pay one penny in taxes on it's growth. If the investments double or triple over time yow will never have to pay income taxes on withdrawals when you use the money for college expenses.
Another benefit to saving with a 529 plan is you do not have to be an expert in investing. All the effort of opening up a bank account is all you need to do. All investment decisions are made by the funds managers. These are trained professionals who know how to make your money grow and how to keep it safe when it's time to be used to pay for college.
Many parents worry that a large 529 account will hurt them when applying for financial aid. The money you have in your account will not count as income on the FASFA form. Though investing the money in a regular investment account will be counted as savings and assets.
For the best way to save for college, use a 529 college savings plan.