Choosing investment accounts Deciding on an account type is easier than it might sound. It just comes down to the reason you're investing.
POINTS TO KNOW
There are specific types of accounts for certain goals, some of which offer tax benefits. If you're saving for college or retirement, start by looking at these account types.
If you're self-employed or own a business, there are specific types of retirement accounts just for you. For everyone else, a 401(k) or 403(b) plan (through your employer) or IRA (on your own) is the way to go.
Start by considering a 529 savings plan or an UGMA/UTMA account. There are significant differences between the 2 account types. If you're sure the money will be used for college, a 529 plan is likely your best bet.
If you're not saving for college or retirement, or if you prefer a little more flexibility, you can open a general investing account. With this type of account, you can buy and sell whenever you want, but you pay taxes on your investment earnings.
If you have an existing trust that's designed to control what will be passed down to your heirs and minimize estate taxes, you can open an account in the name of the trust. We recommend you talk to your attorney or tax advisor about whether this would be appropriate in your situation.