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Planning for a Child's Education

Getting a head start on saving.

Our two cents

Two Cents icon

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

 

Source: Schwab Center for Financial Research. These are general guidelines for informational purposes only. Individual circumstances should be taken into account when actual decisions are made.
© 2024 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.  
 

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.

You can buy diapers and plan for college at the same time.

Tip Icon

You can buy diapers and plan for college at the same time.

You may be focused on finding the best preschool, but your baby will be heading off to college before you know it. A 529 plan or an education savings account (an ESA, also known as a Coverdell Education Savings Account) offers tax-deferred growth to help you save the smart way.

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This information on this website is for educational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

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

© 2025 Charles Schwab & Co., Inc. ("Schwab"). All rights reserved. Member SIPC.

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