Question

Luke’s parents want to save money to use only for his college education. Which of the...

Luke’s parents want to save money to use only for his college education. Which of the following products would be best for his parents?

  • A : Regular savings account.

  • B : 529 plan.

  • C : Stocks.

  • D : Savings bonds.

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Homework Answers

Answer #1

The Correct answer is Option B: 529 plan.

Reasons for correct answer-

The 529 plan introduced by SEC is specifically meant for future educational plans.

Explanation for incorrect options-

The Option A- Regular savings account does not provide enough or higher returns and meant for current or personal use. It cannot be applied for educational proposes.

The Option C- Stocks are higher risky investment products. These stocks are not suitable for educational use.

The Option D- Savings Bonds are moderate risky investments. However, they are not specifically meant for educational purposes as in the case of 529 plan.

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