Other considerations, such as your preference for public or private schooling, and your eligibility for financial aid, may also play a role. Here is a brief summary of some of the more common college funding vehicles. The ever expanding number and types of funds available make mutual funds a popular component of any education funding plan. However, investment return can fluctuate with market conditions and shares may be redeemed for more or less than their original purchase price. Bank CDs offer safety of principal and guaranteed returns.
Interest is subject to tax and current rates are generally low.
U.S. Savings Bonds. However, yields may be lower than with other investments. If these bonds are sold prior to maturity, they may incur a penalty and may be subject to market risk. In addition, savings bonds may not be tax-exempt when personal income reaches certain levels. Zero Coupon Bonds.