• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • College Financial Aid
    • Financial Aid for College
    • Student Financial Aid Eligibility
    • Student Financial Aid
      • Student Loans for College
      • College Financial Aid 101
      • Need Based Student Loans
      • Financial Aid Forms (FAFSA & College Board’s Profile)
      • Military Student Financial Aid
        • College Benefits for Active Duty Military
        • National Guard Education Benefits
        • College Aid for Military Reservists
        • College Aid for Military Veterans
        • Military Dependent Financial Aid
    • Financial Aid Programs
    • Paying for College
  • Scholarships 101
    • College Scholarships (Overview)
    • College Scholarship Applications
    • College Scholarship Essay Writing Tips
    • Unusual Scholarships
    • Unclaimed Scholarships
    • Free College Scholarship Searches
  • Find a Scholarship
    • Latest Scholarship Postings
    • Student Scholarships by College Major
    • Scholarships for Hobbies and Interests
    • Sports Scholarships
    • Community Service Scholarships
    • Association Sponsored Scholarships
  • Find a Student Loan
    • Private Student Loans
      • Sallie Mae Student Loans
      • PNC Student Loans
      • Charter One Student Loan
      • Wells Fargo College Loan Programs
      • Texas Dow Employees Credit Union Loans
      • SunTrust Education Loans
    • How Do Student Loans Work?
    • Types of Private Student Loans
    • Student Loans to Cover Living Expenses
    • Private Student Loan Interest Rates
    • Graduate Student Loans from Private Lenders
  • Saving for College
  • Site Map

Financial Aid Finder

Your Guide to Maximizing your College Financial Aid

Financial Aid Finder HomePage
You are here: Home / FAFSA / The Best Way to Save for College: Uniform Gift/Transfer to Minor Act

The Best Way to Save for College: Uniform Gift/Transfer to Minor Act

August 23, 2012 By mara

Last week, we launched a four-part series about the best tax-preferred college savings vehicles. So far we have covered three out of the four: 529 College Savings Plans, 529 Prepaid Tuition Plans, and the Coverdell Educational Savings Account. Be sure to review those posts, if you didn’t get a chance to read them yet.

Today we are rounding out the series with the least well known of your tax-preferred college savings options, the Uniform Gift to Minor/Uniform Transfer to Minor Act.  In short, UGMA and UTMA are custodial accounts that allow you to save a substantial amount of money in your child’s name for the purpose of college… or anything else… while benefiting from your child’s lower tax bracket.

(By the way, I keep emphasizing “tax preferred” because, of course, you are welcome to save for college in a regular old savings account, or a CD or a mutual fund. The thing is, you won’t get any tax savings. If you use one of the four vehicles we covered here, however, you will. And saving on taxes means more money to save for college!)

UGMA/UTMA

What is it: A simple transfer of assets into your child’s name, which he or she can use for educational expenses upon the age of maturity. The assets can be anything worth money — cash, CDs, mutual funds, or even real estate.

Pros: High contribution limit per beneficiary — $13,000 per year for single filers or $26,000 per year for joint filers; no income restrictions on contributions; anyone can contribute to account; first $900 in annual earnings are tax-free

Cons: Originally contributor has no financial control once the beneficiary reaches the age of majority; ownership cannot be transferred as it is considered an irrevocable gift

Bottom line: Once the only tax-advantaged way to save for college, the UGMA/UTMA has fallen out of favor now that 529 Plans and ESAs offer more financial control, more flexibility and better tax savings.

Want to know more? We recently updated the Financial Aid Finders section on Saving for College to include an in depth review of the UGMA/UTMA accounts, covering frequently asked questions such as “Do my earnings grow interest-free, like in a 529 Plan?” and “How will the money I set aside in a UGMA/UTMA affect my child’s financial aid award?”

So tell us: Are you currently investing in a tax-advantaged college savings vehicle? Which one did you choose and why?

Sallie Mae Student Loans Ad

Filed Under: FAFSA, Financial Aid News, Saving for College Tagged With: saving for college, UGMA, UTMA

Primary Sidebar

FinancialAidFinder Logo
Sallie Mae Student Loans Ad

Latest Scholarship Postings

HCCP Mentoring Program Scholarship (Deadline: October 8, 2025)

June 22, 2025 By The FinancialAidFinder Scholarship Team

2026 Wolf Gustaveson Memorial Scholarship (Deadline: March 21, 2026)

June 22, 2025 By The FinancialAidFinder Scholarship Team

2026 Wolf Gustaveson Memorial Scholarship at Maine East (Deadline: March 21, 2026)

June 22, 2025 By The FinancialAidFinder Scholarship Team

SGA E-Sports Scholarship (Deadline: July 31, 2025)

June 20, 2025 By The FinancialAidFinder Scholarship Team

More Scholarship Listings

Sallie Mae Student Loans Ad

Explore Financial Aid Finder

  • College Financial Aid
  • Saving for College
  • Military Financial Aid
  • Grants for College
  • Student Scholarships
  • Student Scholarship Search
  • Find Student Loans
  • Financial Aid Info
  • Register to Receive College Financial Aid Updates
  • About FinancialAidFinder
  • Contact Us

Tags

529 plans applying for scholarships college college financial aid college savings plan college savings plans college scholarship college scholarships college student loans college tuition community college debt distance learning education engineering scholarship essay scholarships expected family contribution FAFSA federal student loans financial aid financial aid application financial aid eligibility free money for college GI Bill grant Grants hispanic scholarships minority scholarships Pell Grant Pell Grants private student loans reduce cost of college saving for college scholarship scholarship applications scholarship essays Scholarships scholarships for college student financial aid student loan student loan consolidation student loan debt Student Loans Info tuition work study

Footer

About FinancialAidFinder
Contact Us
Privacy Policy
Cookie Policy

Scholarship Submissions

If you offer a college scholarship, you can submit it to us through this form:

Scholarship Submission Form

Copyright © 2025 · FinancialAidFinder - All rights reserved.