Schwab MoneyWise ®
Schwab MoneyWise®

Planning for a Child's Education

Getting a head start on saving

Our Two Cents

Investing a child’s college fund when they’re young can add potential value and compound interest. Making more conservative allocations as they approach college years will help mitigate risk.

While it may seem a bit early to think about college, rising education costs are a fact of life. And it's never too soon to start saving and taking advantage of the power of compounding.

How it can pay to invest early

Investing $100 per month at 5% growth rate

Chart showing the value of investing early. If a family invested $100 a month for their child since birth, they would make $35,000 when the child turned 18. A family who started saving when their child was 10 would make $12,000 on their 18th birthday. Chart showing the value of investing early. If a family invested $100 a month for their child since birth, they would make $35,000 when the child turned 18. A family who started saving when their child was 10 would make $12,000 on their 18th birthday.
Chart showing the value of investing early. If a family invested $100 a month for their child since birth, they would make $35,000 when the child turned 18. A family who started saving when their child was 10 would make $12,000 on their 18th birthday. Chart showing the value of investing early. If a family invested $100 a month for their child since birth, they would make $35,000 when the child turned 18. A family who started saving when their child was 10 would make $12,000 on their 18th birthday.

Here are some ideas to help you get started:

  • Estimate how much you need to save for college.
  • Learn about and compare tax-advantaged college savings accounts.
  • Once you've opened an account, set up monthly deposits and add extra funds when possible. Contributing regularly through an automatic investment plan can make it easier.

(1109-10800)

Investing involves risk, including possible loss of principal.

The information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner, or investment manager.

The Charles Schwab Foundation is a 501(c)(3) nonprofit, private foundation that is not part of Charles Schwab & Co., Inc. or its parent company, The Charles Schwab Corporation.

Charles Schwab & Co., Inc. ("Schwab"). All rights reserved. Member SIPC.