What savings vehicles are best?
Savings Account: Monthly deposits of $100 for 21 years with an interest rate of 0.48% compounded annually you would have a final savings balance of $26,506.42. This is clearly not outpacing inflation with its current average of 3.22%
529 Plan: Money put in grows tax deferred as long as it’s used for qualified education purposes. The funds can continue to grow indefinitely until they are used.
Brokerage Account: Stocks can teach investing sills for late in life. This type of account you have more options and less restriction on what and when the money can be used. As the child gets you can teach them about companies, educate them on the financial world and teach them how the stoke markets work.