Sallie Mae’s High-Yield Savings Account is earning 1.4% Annual Percentage Yield (APY), requires no minimum balance and charges no minimum monthly fees. The accounts are FDIC insured and can be opened online in just a matter of minutes. If you are also a member of Upromise rewards (free to join), you save even more with a 10% annual match of Upromise rewards earnings. Rewards are earned through everyday spending at online and offline retailers, restaurants, gas stations and grocery stores when you use debit or credit cards you have linked with your Upromise accounts. Money earned in a Upromise account can then be transferred to a college savings program of your choice, such as a 529 Account.

In addition to High-Yield Savings Accounts, Sallie Mae also offers Certificates of Deposit and a variety of college savings plans. CDs with Sallie Mae have no minimum balance or monthly fees and rates from 1.55% APY for 12 months to 3% APY for 60 months. Both the Certificates of Deposits and High-Yield Savings Account are offered through Sallie Mae Bank, member FDIC. Sallie Mae’s Upromise Investments offers tax-advantages 529 savings plans.

“The Sallie Mae savings account earns more interest and helps our family save for college, for us it was a no brainer,” said Julie M., a mother of four from Cincinnati. “The account was no trouble to open and the high rate combined with Upromise benefits will help us build our savings.”

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SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading saving, planning and paying for education company. Sallie Mae’s saving programs, planning resources and financing options have helped more than 31 million people make the investment in higher education. Through its subsidiaries, the company manages $182 billion in education loans and serves 10 million student and parent customers. In addition, the company’s Upromise program has enabled 12 million members to earn more than $525 million in rewards to help pay for college. Its Upromise affiliates also manage more than $25 billion in 529 college-savings plans. Sallie Mae offers services to a range of institutional clients, including colleges and universities, student loan guarantors and state and federal agencies. More information is available at www.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.

Sallie Mae (NYSE: SLM) Announces New Savings Account Interest Rates was created by and is property of American Consumer News.

With two children under the age of six – I have many years to think about their college education.  But as we all know, the first rule of saving is to save as much as you can, and start as early as you can.  I used to think saving for college was a bad idea in general – because the amount of savings you or the child has directly affects the amount of financial aid you are eligible for through the college you select.  In other words, if you have $110,000 saved by the time he or she reaches college age – the school will consider 100% of it as your contribution to the child’s education and chances are, having a sizeable amount of cash saved will make you ineligible for all need-based financial aid.  Even if half of that savings was supposed to be going toward your retirement, or the downpayment for a new house you’ve been saving for.

If you save money in a 529 plan, however, only about 6% of the total savings are used when calculating a child’s eligibility for need-based financial aid.  The money also earns interest on a tax-free basis.  Each state has it’s own policies regarding how 529 plans work, but you can expect that the plans not only earn on a federal tax exempt basis, but withdrawals used for qualified education expenses are also tax-free. Some states waive state taxes for residents, other states allow deductions on contributions – check with your particular state for the specifics.  The 529 plans offer generous maximum contribution limits, and other family and friends can contribute to a 529 plan for a child (and the money is not considered part of their estate). 

If your child grows up and decides not to go to college, you have a few options.  You can switch the 529 plan beneficiary to a child in your family who IS going to college (a brother, sister, cousin) or you can switch it to an adult family member who is going to continue their education.  If there is no one else to switch the 529 fund to; or you want the child to receive the money despite not going to school, you can withdraw the money for non educational purposes, but you will pay a 10% penalty and the money will become taxed as income at that point.

Note: Each 529 plan has its own set of rules and restrictions, which are subject to change. Make sure to request the most recent plan details from plan administrators.

My favorite part of the 529 plans is that you can set them up and allow other family and friends to contribute to them.  Every year as the holidays and birthdays of my children approach, our family begins asking me for ideas for what gifts to give them.  Now, instead of spending their entire gift budget on toys the children will outgrow in the blink of an eye, I ask them to contribute some of their gift into my child’s 529 account.  To make this as easy as buying something online, we enrolled in FreshmanFund.com.  It works like a gift registry – my children have registries and people can come and contribute with credit card or bank transfers.  The money is held in an account managed by FreshmanFund.com until I transfer it to the child’s connected 529 plan.

Giving the gift of education couldn’t be easier – and it’s a gift that will grow with the child until he or she is ready to use it!

Better Than Barbie: Saving for Your Child’s Future Education was created by and is property of American Consumer News.

Lots of college graduates know what it’s like to exist on ramen noodles and Kool-aid during some of the tougher financial times at school. Living off the generosity of mom and dad doesn’t mean you need to go spend crazy with incidentals. In fact, a grateful child should work harder to avoid costly their parents additional funds. College students often get part time jobs to supplement their spending money and “going out” cash. Those students typically learn fast that money doesn’t grow on trees and if they want to make the fun last, there needs to be a budget on spending.

There is no reason why a kid can’t be frugal, especially in college. Here are five tips to keep more cash in your pocket on campus.

1. Live At Home – If this is an option, take it. Of course many kids worry about the cramp in their new social life but living at home throughout your college career can help save a ton of money that could be spend on further education or relocation after graduation. Plus, meals and laundry are free. For kids wishing to contribute, or for parents that want to exercise a lesson in adult responsibility, an agreement regarding monthly expenses and who pays for what is an option.

2. Ride A Bike – If it is not an absolute necessity, leave your car at home. With the rising costs of insurance, parking fees, gas, and maintenance, having a car in college isn’t very cost-effective. Get a used bicycle to get you to class or the off-campus apartments of your friends. On the bright side, no one can keep bugging you to make the beer runs.

3. Party at Home - College kids like to blow off steam and socialize. Save a lot of money by staying out of the clubs and bars and instead host a small group of friends at your place. Ask for contributions towards drinks and foods so you don’t foot the bill all on your own.

4. Look for Paid Opps – Some colleges and universities offer paid work experience in different majors. In addition to the extra spending cash, the work experience can be invaluable and looks great on a resume.

5. Flaunt the Student ID – Areas that are accustomed to a large demographic of college students will often house businesses that give discounts for various forms of entertainment, including movie theaters, restaurants, and sporting events.

6. On-Campus Entertainment – Many schools offer free or at least reasonably priced tickets to on-campus concerts and other entertainment outlets. Check the student union or informational boards for different activities that are sponsored by the college.

5 Ways to Be Frugal in College was created by and is property of American Consumer News.

A 529 Plan is a college savings plan operated by each state.  The specifics of the savings plan will vary depending on how the state you live in has set it up, but the idea is the plan allows you to save for college with special tax benefits. 

It comes down to financial aid programs.  When the child is ready to apply for financial aid for college, there are certain accounts that will play a role in the child’s eligibility for financial aid and other accounts that do not effect the amount of financial aid awarded.  If a parent had opened a 529 account for a child, that money is then used when the financial aid award is determined- but when a grandparent opens a 529 account for their grandchild, that money is not calculated in the eligibility for financial aid assistance.

Financial aid calculations almost always use 12% of parental assets as ‘available’ for paying educational expenses.  So, if a parent has a 529 account, it is factored into the decision.

When it comes to withdrawing the funds for a 529, there are no extra advantages for parents or grandparents- but there are really no disadvantages either!  Money withdrawn from a 529 account that is then used for tuition, books, room and board is withdrawn federal tax free.

What should be considered when deciding whether it’s better for a grandparent to open a 529 account or the parent; is what potential tax breaks are available for either party within the state they live in.  Each state has slightly different 529 Plan tax benefits, and can vary also by contributor’s age.

Some states allow contributors over the age of 70 to deduct the full amount of 529 contributions on their tax returns, while a younger contributor will have a maximum contribution limit for deductions.

Grandma’s 529 Account Probably Better was created by and is property of American Consumer News.

What if you  have no plans for offspring?  You can still let your every day spending benefit your own college education if you used loans to finance some or all of your higher ed costs.

It can be really difficult to be disciplined enough to stretch your dollars into savings accounts for yourself and/or your children.  Most families don’t feel there is enough money to go around- so this is a good way of letting the things you are already buying benefit your long term savings goals- things like groceries, holiday presents, and restaurant meals.

Upromise is a program that gives people a way to connect the debit and credit cards they are already using, as well as grocery store discount cards, to their Upromise accounts.  Each time you use the card at participating retailers or to purchase certain products, a small percentage of the purchase will be credited to your Upromise account.   

Additionally, if you do online shopping (and who doesn’t this time of year?) logging into your Upromise account first, and then clicking on the various store shopping links from within their site will result in higher rewards to your Upromise account.  It’s a simple step that if you remembered to do it each time, could result in a few extra dollars credited to your account every time you did your online shopping.

In fact, participating Upromise companies fall under the following categories:

• consumer packaged goods
• Grocery stores
• online stores
• Local retailers
• Restaurants

Earnings in your account can be saved for a beneficiary that you designate; can be applied to your existing school loan payments; or can be transferred into a NY 529 account  (which is a tax-advantaged college savings program- I am sure other states have equivalent plans that can be connected!) In my personal Upromise account, I actually have both of my children set up as beneficiaries, with the older child receiving 45% of the earnings, the younger child receiving 35% of the earnings, and the remainder going towards my own college loan payments.

Additionally, you can grow your earnings faster by inviting your family and friends to connect their grocery store cards and debit cards to your Upromise account also.  You don’t see their card numbers within your account; but whenever your connected friends and family shop with their cards, their earnings are then credited to your own account.  I actually earn three times as much from purchases my mom and aunt make as I do my own!

College Savings From the Money You Already Spend? was created by and is property of American Consumer News.