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Accounts for College Savings

Opening an account for a child can be more than just a significant financial gesture; it can also serve as a valuable financial learning tool for the beneficiary as he or she grows older. Three types of accounts commonly opened for or on behalf of a child are UGMA Accounts, Coverdell Education Savings Accounts and 529 Plans. They each differ in terms of contribution and participation limits, taxability, control, and investment options. Each one has its advantages and disadvantages to the donor and the child. Below is a brief summary of each.

Uniform Gift of Minors Act (UGMA)

These accounts can be immediately helpful…

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