College Investment Plans - Opening Account
Anyone can open an account – Teenvestors, parents, grandparents, uncles, aunts, and friends. Theoretically, a total stranger can open an account for you. When an account is opened, the person who opens it, otherwise know as the account owner, has to designate who should benefit from the account. A Teenvestor can designate herself as the person who will benefit from the account.
The person for whom the account is opened is called the beneficiary. Anyone with a social security number can be a beneficiary but each account may have only one designated beneficiary. There are no restrictions based on age, relationship to the account owner, or in some cases, state residency of the account owner or the beneficiary. As long as a Teenvestor has a social security number, she can designate herself as the beneficiary.
Multiple accounts can be set up for the same beneficiary as long as the plan’s maximum limit is not exceeded. For example, at the time of this writing, the Arkansas Gift College Investment Plan had an aggregate contribution limit of $245,000 for any one individual. In Pennsylvania’s plan, called the Tuition Account Program (TAP), the aggregate maximum contribution currently allowed is $260,000. These maximum amount will probably never be reached by a Teenvestor, but if your parents are the ones who have set up the account, they should know about these limits.
Choosing A Plan
The decision whether to invest in a College Savings Plan probably depends on your prospects for getting financial aid when you are ready to go to college. For this reason, your parents have to be fully involved in any college savings plan considerations. In the "Parents" section of this website, we explain to your parents what to consider when choosing College Savings Plans. The table below shows you websites where you can get all the information you'll need about College Savings Plans. You can get all the information you need about College Savings Plans at collegesaving.org or savingforcollege.com.