Safe Ways to Save
To save your own money for your child’s future, you will need a safe and reliable financial account. Families of Boston Saves students can link four kinds of accounts in the Savings Center: A savings account, Boston Saves custodial account, checking account, or 529 account.
Learn the important differences between these accounts and how to open them.
A savings account is useful for saving because it earns interest. This means that the longer the money stays in the account, the more money it earns. For example, if you put $20 in a savings account that earns 0.05% interest, you would have $21 a year later. If you put in $200, you would have $210. The more time that passes, the more the money grows.
Different savings accounts have different rules and benefits. You can contact your local bank or credit union to open a savings account. Or you can contact Bank On Boston for help finding a savings account that’s best for you.
Boston Saves Custodial Account
A Boston Saves custodial account is an account at Metro Credit Union that is held for your child by the Boston Educational Development Fund, a long-time nonprofit partner of BPS. A custodial account works just like a savings account, except that you do not need a social security card or identification card to open it. Also, the money in the account has no effect on a family’s public benefits. The Boston Saves custodial account is specifically for families of Boston Saves students.
To open a Boston Saves custodial account, email firstname.lastname@example.org or call 877.MY.METRO (877.696.3876) ext. 4003. For Spanish, email email@example.com or call 877.MY.METRO (877.696.3876) ext. 4005.
A checking account is useful for quick and easy access to money. The account lets you put money in and take money out often. This is helpful for bills and other day-to-day needs. However, a checking account usually has a lower interest rate than a savings account. This means the money does not grow as much as it could.
Different checking accounts have different rules and benefits. You can contact your local bank or credit union to open a checking account. Or you can contact Bank On Boston for help finding a checking account that’s best for you.
A 529 account is useful for saving money for education. The money in a 529 account is put in mutual funds, which can go up or down in value based on the stock market. This may lead to more growth than a savings account. There are also tax benefits to using the money in a 529 account for education costs (such as college or an apprenticeship program). This way, you get more value for your dollar.Each state runs its own 529 account with its own rules and benefits. You can open a 529 account through MEFA (Massachusetts Education Financing Authority) or through another state.
ABLE (Attainable Savings Plan) Account
An ABLE account is a special account for people with disabilities. The money in an ABLE account is put into the stock market, which can lead to growth. There are also tax benefits to using the money in the account for disability-related costs such as education, housing, healthcare, and support services. The money in an ABLE account has no effect on other disability benefits, such as Supplemental Security Income (SSI).