- Office of Economic Empowerment
Are you or someone you care about welcoming a new baby? With a seemingly endless list of things to do, thinking about education savings probably isn’t high on your list of priorities. But you know that saving early is the best way to set your child up for success. That’s exactly why the Massachusetts Treasury is giving you a $50 head start with BabySteps, so you can make sure your baby’s college and career training fund is taken care of. This 529 Day, we welcome you to claim your baby’s $50 or share BabySteps with the new parents in your life.
What’s 529 Day?
May 29th is nationally recognized as 529 Day to raise awareness about 529 college and career savings accounts. These tax-advantaged accounts allow families to save for their children’s future educational expenses. Funds saved in a 529 account can be used for things like college tuition, books, room and board, and apprenticeship or vocational education costs. The Massachusetts 529 is the U.Fund, managed by the Massachusetts Educational Financing Authority (MEFA).
What’s BabySteps?
BabySteps is a free program from the Massachusetts Treasurer’s Office of Economic Empowerment that helps families save early for their children’s future. When you open a MEFA U.Fund 529 account for a child within one year of birth or adoption, BabySteps provides $50 to get you started.
It’s completely free to claim your $50 and start saving, and there are no fees or minimum contributions required to open the account. BabySteps was designed to be an easy way for Massachusetts to start saving for their children’s future as soon as possible.
Are you a SNAP recipient? See how you can receive an additional $120 in savings with SNAP into BabySteps.
The Power of Starting Early
Okay, saving is important, but why start at birth? Through compound interest, even a small amount of savings can grow significantly over eighteen years. Compound interest is when your savings earn interest, and then that interest also earns interest (it’s kind of like a snowball that keeps getting bigger as it rolls down a hill).
For example, let’s say you start out with $50 from BabySteps when your child is born. Assuming an average return rate of about 7%, even if you didn’t contribute anything else into the account, your child would have over $2,000 when they’re ready for college or a trade program.
That’s why BabySteps is designed to help you take advantage of compound interest while your child is young. Ensuring you don’t miss out on valuable years for your savings to grow.
How to get started
Here are a few things to know about saving with BabySteps:
- Open a MEFA U.Fund account within one year of the child’s birth or adoption to receive $50
- The child must live in Massachusetts at the time the account is opened
- Anyone can open an account on the child’s behalf, including relatives and friends.
- The account must be an “individual” account to receive the $50 BabySteps deposit
