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How Do I Set Up College Savings Accounts for My Kids?

Almost any fund company or brokerage will allow you to set up UGMA or UTMA accounts.

I am trying to find information on saving money for a child in some sort of college education fund. What fund families offer various choices for UGMA or UTMA accounts that are established to save money for college? -- J. David Salinas

J. David,

Setting up a custodial account for a child is easier than hooking up the kid's PlayStation.

As your pointed out, these custodial accounts are opened under the Uniform Gift to Minors Act, called UGMA, or the Uniform Transfers to Minors Act, or UTMA, depending on the state in which you live.

These accounts are set up in a child's name, allowing minors to benefit from owning securities, mutual funds or other investments. An adult acts as custodian of the account. There are plenty of benefits and a few drawbacks to UGMA/UTMA accounts, which


contributing editor Vern Hayden detailed in a

piece about saving for college.

You can establish an UGMA or UTMA account at virtually any mutual fund company or brokerage firm and then fill it with the securities and funds of your choosing. Opening one of these accounts over the Internet is quite simple.

You can retrieve a new account form on many fund company Web sites. I checked out sites for




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, and they all deliver easy-to-find new account forms. Sometimes, the UGMA/UTMA accounts are an option on the standard account (non-retirement) form. You will need to fill in the name and social security number of the custodian and the minor. (It's OK if the minor's social security number has been applied for but not received.) Once you have completed the application, it's just a matter of mailing it in.

Even better, some fund companies, including Vanguard and

Strong Funds

, will lower their standard investment minimums for UGMA/UTMA accounts. (Strong Funds, by the way, offers a great site for planning for a child's education. It's located at

If have any specific, tax-related questions, I encourage you to email the Tax Forum at

Send any other questions or comments to and include your full name.

Dear Dagen aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.