As one prepares to pursue higher education, savings play a crucial role in the way finances have to be managed. Apart from regular savings account for students, there are alternatives that give the benefits of tax advantage, helps you to pay secondary expenses, and reap other gains. Herein, we discuss various savings accounts that give students major benefits.

Students Savings Accounts
This is where it all starts. Being a student, this short-term account is ideal in all aspects including safety, accessibility, benefits and freebies, accrued interest and managing finance. Your savings account must be insured by the Federal Deposit Insurance Corp. or National Credit Union Administration in situations of emergency. Plus you get the benefit of accrued interest, which is best when it is saved in times of dire needs. You got to find the best bank that holds a place in the new modern era unlike a very traditional one to keep your savings intact.

529 College Plans
This tax-advantaged savings account is meant for higher education expenses. It’s basically after-tax money that is invested in bond funds and low-cost stocks and is used in qualified education needs. This savings account can be opened from the time the child is born and is ideally used for undergraduate and graduate studies. Some portion of the amount can be also used for children attending private schools. These accounts give a huge benefit in the form of tax relaxation. All gains are tax-deferred and parents are not under any obligation to pay taxes provided the amount is used for qualified educational expenses. However, there could be instances of additional taxes in a few states while there are no taxes levied on withdrawal. Essentially, this savings account must be specifically used for education purposes to avoid any tax penalties.

Roth IRA
Though this savings account is used for retirement, students can contribute after-tax to stay tax-free and enjoy the benefit of flexibility. Early withdrawals can be made under certain exceptions such as to cover qualified education expenses. In case one needs to finance their child’s freshman year, this savings account can be opened five years before graduation.

Coverdell Education Savings Account
This is another alternative 529 savings plan, where you can use the funds to finance college expenses and other secondary education needs. Since the money is after-tax, you get the advantage of tax-free money, and so your savings grow without any obstacles. Withdrawals also remain tax-free as long as the savings are used for certain purposes. The funds can be also used for secondary expenses related to education such as uniforms, tutoring programs, and others.

Prepaid Tuition Plans
This savings account is another alternative to the 529 plan wherein you are saving for education in state-public universities. The funds do not get affected by stock market fluctuations.

There are tons of saving methods but the idea is to save as early as possible for the money to grow. And with accounts that have tax benefits, you will be in a better position to finance a student’s education in a more organized manner.