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Best way to save for college

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Essential strategies to help you save for your child’s education

A priceless gift for your child? Getting a head start on college costs.

Get a head start on saving for your kid's education:

When to start saving for college

The short answer: As soon as you can. Time is your best friend when it comes to saving for a future expense—especially a major one like college tuition. The longer you save, the better chance you have to benefit from compound interest, which can mean exponential growth. You can open a 529 college savings account for your child as soon as they have a Social Security number—and we’ll get into the details of how that works in a bit. We all know the benefits of a college degree—and being able to help your child graduate with less or possibly no debt may take a weight off their shoulders so they can focus on school itself. 

How much you should save

The average cost of tuition has been climbing for years, so keep an eye on the numbers and adjust your savings plan as needed. Using the calculator below can help you estimate how much you’ll need to save based on the latest tuition trends and your personal financial goals.

A bar graph illustration that reads: Average annual tuition increase over ten years. In the year twenty fourteen, it was nine thousand, two hundred and twenty nine dollars for public, in-state school and thirty three thousand, one hundred and fifty three dollars for private. In the year twenty nineteen, it was ten thousand, six hundred and fifty five dollars for public, in-state school and thirty nine thousand, five hundred and thirteen dollars for private. In the year twenty twenty four, it was eleven thousand, nine hundred and seventy dollars for public, in-state school and forty six thousand, six hundred and fifty two dollars for private.

Set a goal and your intentions

Picking a realistic savings goal can help you save more consistently. Make sure your family knows what your goal is. Also, include college savings in your budget so you and your partner or co-parent are on the same page. Setting up monthly automatic transfers is a good way to ensure you’re putting a little away each month without having to think about it

Look into a 529 college savings accountDisclosure 2

529 college savings plans are state-sponsored, tax-deferred accounts you can invest in to help cover certain qualified education expenses, including higher education. You can open one as soon as your child is born, which would give you about 18 years to save for one of the biggest investments you may ever make together. (You can also open a 529 in your name before your child is born, then transfer it to your child later.) With a 529, you can invest in diversified funds and then withdraw the money for certain education expenses without having to pay taxes on your earnings. Since 529 accounts are state-sponsored, the benefits, restrictions, and rules for withdrawals can vary depending on where you live. Some states, for example, may offer you bigger tax deductions for your 529 contributions. So before opening one, look up the 529 program in your state to see if it makes sense for you. 

Consider other savings options beyond a 529

If you want more flexibility with how and when you can spend your child’s college savings, you may want to consider other options beyond a 529 account. A standard savings account comes with fewer restrictions on withdrawals and eligible expenses, but you likely won’t get the same return on your savings as you would with an investment account. Another option would be to open a traditional or Roth IRA (individual retirement account) to grow your savings. Retirement accounts come with their own set of restrictions, like annual contribution limits and restrictions around when you can withdraw money without paying penalties. You may also want to keep your retirement savings separate from other savings. So if you’re considering either of these alternatives to a 529, it’s a good idea to weigh the potential benefits and drawbacks of each option before committing to a strategy.

Have conversations about scholarships and financial aid

Scholarships and financial aid can be potential supplements—not replacements—for a good college savings plan. When the time comes, talk with your child about these options, and, if possible, you or a college advisor can help them with their applications. Even if your child gets a full scholarship to a college they love, you can use your savings to help pay for other expenses like books or to support other future endeavors.

Get your kid involved

As your child gets older, make sure they know you’re saving for their education. Explain the differences between public and private universities, and get them thinking about where they want to go and what they want to do. As they get closer to graduating from high school, you can talk with them about the cost of college, ways to pay for it, and how federal and private student loans work. You can even encourage them to contribute some of their own money toward their college fund. 

This content does not constitute legal, tax, accounting, financial, investment, or mental health advice. You are encouraged to consult with competent legal, tax, accounting, financial, investment, or mental health professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

College savings calculator

This calculator is made available by one or more third party service providers. It is not intended to be an advertisement for a product or service at any of the terms used herein. It is not intended to offer any tax, legal, financial or investment advice. All examples are hypothetical and are for illustrative purposes. Truist Financial Corporation ("Truist") and its affiliates do not provide legal or tax advice. Truist cannot guarantee that the information provided is accurate, complete, or timely. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Truist makes no warranties with regard to this calculator or the results obtained by its use. Truist disclaims any liability arising out of your use of, or any tax position taken in reliance on, this calculator. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Save more for your family’s future.

Saving? More like building. Building personal goals. Building interest. And building more perks—the cash in your Truist One Savings account may help you get more benefits from your Truist One Checking account.Disclosure 3

Check out Truist One Savings for the future.

Easy to get started

Start your savings journey with a $50 opening deposit. And once you get going, there are simple ways to waive the $5 monthly maintenance fee.Disclosure 4

Convenient access

Wherever your family goes on life’s journey, you can easily access your savings online or through the app. 

Build better habits.

While you’re saving for college, every dollar counts. Automate your saving to stay on track and help you reach your goals.

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    Disclosure 1 “A Look at 20 Years of Tuition Costs at National Universities,” U.S. News & World Report, Sept. 22, 2023.

    Disclosure 2 Before investing, investors should consider whether their home state or their designated beneficiary’s home state offers any state tax or any other benefits such as financial aid, scholarship funds, and protection from creditors that are only available to residents of that state. Any state tax benefits associated with a 529 plan apply only to residents of the state sponsoring the plan. 529 plan values will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Investors should consider the investment objectives, risks, charges, and expenses of the plan carefully before investing. An official statement, which contains this and other important information, can be obtained from your financial professional. Please read carefully prior to investing. Withdrawals may be subject to state income taxes depending on the participant’s state of residence. Non-qualified withdrawals are subject to a 10% penalty.

    Participation in a 529 plan does not guarantee that contributions and the investment return, if any, will be adequate to cover future tuition and other higher education expenses or that a beneficiary will be admitted to or permitted to continue to attend an institution of higher education. Neither Truist Financial Corporation, nor any of its affiliates, underwrite 529 plans.

    Disclosure 3 Refer to the Account Overview Guides and the Personal Deposit Accounts Fee Schedule for detailed information regarding each feature, benefit, and/or fees listed for each product.

    Disclosure 4 The monthly maintenance fee can be waived by:

    • Maintain a minimum daily ledger balance of $300 OR
    • Schedule a recurring preauthorized internal transfer of $25 or more per statement cycle into the Truist One Savings account OR
    • Waived for a minor under the age of 18 OR
    • Waived with ANY related Truist checking product

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