How to Save for College

Stocks, Straight Up

"Stocks are the best way to achieve the kind of returns you'll need to keep up with rising tuition costs," says Allen N. Jones, a senior vice president at Merrill Lynch. Even though stocks can be riskier than other types of investments, the added risk means you may make more money than you would with a safer investment. And since you won't need the money for many years, if the market goes down in any given year, you'll have plenty of time for your investment to bounce back before tuition bills are due. Historically, investing in the stock market has also been the best way to get a high enough rate of return to beat inflation.

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