Vanguard - saving for college (2024)

• You can contribute as much as you want, but amounts above $15,000 per year ($30,000 for a married couple filing jointly) will incur federal gift tax.
• Anyone can open or contribute on behalf of a child.
• There is no penalty if account assets aren't used for college.

UGMA/UTMAs at a glance

• These arecustodial accounts with assets held in the child's name, so contributions are irrevocable.
• Upon reaching the age of majority, the beneficiary can use the assets for any purpose—educational or otherwise.
• There is a significant impact on federal financial aid. The accountis treated as the child's asset andweighed more heavily in financial aid calculations.
• You can'tchange beneficiaries.
• Contributions aren't tax-deductible.
• Earnings are subject to federal income or capital gains tax.

• A broad lineup of Vanguard mutual funds.
• Among the lowest expense ratios in the industry.
• No enrollment, transfer, or advisor fees.
• Custom scheduling to electronically move money between your bank account or other Vanguard accounts and your UGMA/UTMA.

Tip: You can redeem an UGMA/UTMAheld at another company and contribute the assets to a Vanguard UGMA/UTMA or Vanguard 529Plan account. Note that such a transfer may be a taxable event.