College Investment Maryland Plan


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College Investment Maryland Plan

College Investment Maryland Plan

Financial terminology can be confusing, especially with financial planning for college. Parents are lost as to what investments to make and not to make and often end up handing the job over to a financial adviser. This, however, is a mistake. Though it is a good decision to use a reputable financial adviser, it's never a good decision to be uneducated about the investment portfolio. Instead, take hold of financial planning for a child's future college education and research investment options such as zero coupon bonds.

The Basics of Bond Investing

Firstly, it is best to understand what an investment grade bond is. This type of investment has a lower risk, since it is bought to mature. For example, parents could buy an investment grade bond when the child is eight years old and wait for the bond to mature until s/he turns eighteen and is ready to go to college. The key is to wait until full maturity. If parents sell early, they could receive a low return on their investment. At full maturity, the parents would sell the bond for its full face value and expected yield, so they will have a good return on their investment.