Re: Investing for Children?
529 is good because you don't pay taxes on earnings (now) - and earnings are tax free when you withdraw. Well, if you use it for education. Kind of like some retirement vehicles.
Just keep in mind that with high yield interest or other investments, that you will pay income taxes on the amounts. Due to the kiddie tax rules, generally you will report your children's investment returns on your tax return at your tax rates. maybe less of a concern now but can be a lot as it grows over 20 years.
There are muni bonds and other investments that aim to be tax-free. & also mutual funds that avoid too many dividends and capital gains - so less tax paid. Just FYI.
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