The Gerber Life Parenting Blog

Why Savings Rates Matter

July 24, 2012

Family Comparing College Savings Plan RatesAs with all other savings accounts, the savings rates between college savings accounts can vary, but, with the ever-rising cost of college tuition, you’ll need to find a college savings account that yields significantly above the rate of inflation if you want your “today’s” dollars to grow enough to afford tomorrow’s education. Figuring out which accounts have the best savings rates obviously makes financial sense, but where do you start?

You can find the best savings rates by comparing plans. As of August 2011, the majority of traditional savings accounts were paying Annual Percentage Yields (APYs) of approximately 0.85 to 1.15 percent. That’s significantly below the inflation rate of 3.6 percent (as of Aug. 9, 2011).

Other options that may provide the best savings rates include either a 529 savings plan or investing in certain higher yield bonds. Either college savings account option is likely to return a yield higher than that of inflation without the added risk that typically accompanies a college investment account, such as an IRA.

Additionally, you could choose to save for college with the Gerber Life College Plan, which offers one of the best rates available. With a guaranteed payment of between $10,000 and $150,000, and an affordable fixed premium designed to meet your family’s budget needs, you’ll be sure to have the right amount of money set aside for your child’s education.



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Categories: College Planning
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