UNest Tax-Advantaged Investment Account For Kids

Fulfill Your Kids' Future Dreams
An investment account that allows you to save for your children’s future while getting tax benefits.
$0
Minimum Deposit
Up to $2,200/year
Tax-Free Earnings
$4
Monthly Fee

Details

Use Funds For
Education, first car, house, pay for a wedding, or adult dreams.
Best For
Families with young children
Type of Investment
Choose among five different investment plans
Tax Advantages
Varied by the deposit amount
Penalty for Early Withdrawal
None (if used for the child)

Video

UNest is an investment account for kids that allows you to save for your children’s future while getting tax benefits. You can start saving now for your child’s future goals and use the funds to help your kids with a large purchase, like going to college, purchasing a car, or paying for a wedding when they grow up. 

For the 2020 – 2021 school year, the average cost of college tuition in the United States is $9,687. This price tag is for students attending a state school in their state while living at home with their parents. If you add room and board, the number can soar by another $8,000 or more, and these numbers are per year. These numbers make it clear if you have kids, the time to start saving is now. It might be time for you to open a 529 college savings account to avoid student debt for your children. In 1996, the Internal Revenue Service (IRS) added section 529 to the tax code. It offered some people with tuition-saving programs the chance to save money without paying taxes on it. In addition, different financial institutions and some universities provide various 529 savings accounts. Here’s everything you need to know about the 529 savings plan and how UNest could be an alternative if your kids want to use the funds in the future for anything else rather than college.

How Does a 529 Savings Plan Work? 

A 529 savings program can be used to pay for college tuition or tuition for private schools for kindergarten through 12th. There are two types of 529 savings plans, one offered by the state and individual universities. You can use the funds from your 529 savings program to attend any university, even if it’s out of state. You name a beneficiary of the plan — typically your child — and start placing money into it. These are considered a gift for the beneficiary, but if the plan meets some basic requirements, you receive a five-year gift averaging and tax-free distributions if they qualify. What does that mean? The IRS code allows you to give a child a certain amount of money each year without being subject to tax. You can super save one time. This means that one time you can place up to the five-year maximum gift into the account. For example, if the maximum yearly gift is $15,000, you can make a single contribution of $75,000. Tax-free distribution means that you don’t pay taxes when using the money for its intended purpose. 

How Does The UNest Tax-Advantaged Investment Account for Kids Works?

With UNest tax-advantaged investment account for kids, you can receive an annual tax benefit of up to $2,200, and the first $1,100 the account earns is tax-free. Also, you can invite friends and other family members to invest in your child’s future. There are five varied investment plans, so you can choose the one you feel is best for your child’s age. If you need to withdraw funds early for your child, UNest won’t charge you an early penalty. Although the plan isn’t a 529 plan, it does offer benefits that the 529 doesn’t. By opening this investment account for kids, you, your family, and friends can work together to help your child go to university or fulfill any other dream they may have in the future.

What Are The Benefits of Opening an Investment Account For Kids with UNest?

Opening an investment account for kids with UNest is similar to creating a 529 plan for your child. This plan is for parents, family members, or family friends who want to create a child’s college fund. There are many benefits, such as:

  • Family and friends can also invest money in the same account to provide your child with a larger investment fund and return on it. 
  • You can establish automatic monthly contributions to the account with a minimum amount of $25.
  • Five options for investments. 
  • Age-based investments. 
  • The first $1,100 of earnings are tax-free. 
  • Up to $2,200 per year tax benefit. 
  • Funds withdrawals for child-related expenses can be made without paying a penalty. 
  • Earn extra funds for the account by shopping at places you love, such as Disney, Old Navy, and more. 

College is expensive. You and your family can start saving now to invest in your child’s future and lower your tax bill at the same time.

What Is UNest?

UNest is a college savings app that you can use to save for your child’s college or other future big purchases for your children. UNest app can be used on both an Android platform and Apple products from phones to tablets. They are considered a registered investment advisor (RIAs) and an alternative to the traditional 529 Plan. When you invest with UNest, the funds are invested in an advisor-sold 529 plan overseen by Invesco. 

UNest Mobile App Features

You can download the UNest mobile app on your Android or Apple smartphone or tablet. Here are the best UNest features: 

  • Sign up in around five minutes. 
  • Set up automatic contributions to your children’s accounts.
  • Invite family and friends to invest. 
  • Choose the best investment strategy for you. 
  • Manage your portfolio options for each of your kids.
  • Shop with partners to invest more money. 
  • See your balances. 
  • Access the app from your phone from anywhere at anytime

The UNest app is user-friendly and ready to help you start investing in your child’s future with so many features, and you can use it like an apple or android app. The app uses bank-level security to make sure your financial data is protected. 

UNest Fees

UNest has straightforward pricing for their accounts. UNest charges a flat monthly fee of $3 or $6 per month, depending on your plan through the app. UNest app offers two different plans depending on the number of kids you want in your account. 

The Regular Plan costs $3 per month, while the Family Plan is $6 but allows you to have up to 5 children in your account. Both plans will enable you to:

  • Have a choice of five age-based investment options.
  • Receive unlimited gifts from your family and friends into your children accounts
  • Access the feature UNest rewards to earn cashback when you make purchases at certain brands
  • Use the savings calculator to plan saving goals.

How to Get started With a UNest Investment Account for Kids

It’s easy to get started. Use these four steps: 

  1. Get the app
  2. Set up a monthly deposit. 
  3. Ask friends and family to contribute. 
  4. Watch your child’s college fund grow. 

If you’re an employer, create a UNest account as a benefit for your employees

FAQs About College Plans (5)

  • What is the best investment account for a child?

    UNest investment account may be your best option if you are looking for flexibility to use your funds. This account offers the same tax advantages as a 529 plan while providing you with more flexibility, like allowing you to withdraw money without a penalty early, providing it for expenses related to your child.

  • Are college savings accounts tax-deductible?

    While the money you place into the account is not tax-deductible, your child doesn’t need to pay taxes on the gift up to the yearly limit. Also, you can put a one-time five-year maximum into the account without paying taxes.

  • What is the average return on a 529 college saving plan?

    From 2011 to 2020, the average growth rate was 12%, so your average return would be 12% of your investment. But, of course, since you’re making monthly contributions, the return becomes higher as the amount you invest increases.

  • Is a college savings account 529 better than a savings account?

    Yes, a college savings account 529 is better than a savings account. A savings account usually pays less than a 1% return in interest.

  • What is the maximum contribution of a 529 college saving plan?

    The maximum contribution of a 529 college saving plan varies by state. Some states allow contributions up to $380,000; however, your child would need to pay taxes on a contribution that large. In addition, the amount you can give changes in the tax code from time to time, and it can be based on the relationship to the individual, so you may want to check before contributing large amounts.

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UNest Tax-Advantaged Investment Account For Kids

Fulfill Your Kids' Future Dreams

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