<prompt> Human: Me and my wife dont know much about saving other than putting money into a non-spending account and letting it sit. We are pretty decent with money, no debts and decently sized goal and emergency funds.With the little bit of research I did, the two main options my bank offers dont fit our wants.I dont want to completely rule them out, but let me tell you why we wrote them off.529 plan: We didnt want this so much as it can only be used towards education, or incur high tax rates. UgmaUtma:. One thing that turned us off about this plan was that at 18 sometines 21 that money is legally hers. I was and idiot when I was 18, doesnt mean my daughter will be but lets not risk it.Information for consideration. This money will be stewing for at least 17 years.Contributions will be at least 1,500 per year. Definitely not more than 4,000.  <response>: 529 plan: We didnt want this so much as it can only be used towards education, or incur high tax rates.I would urge you to reconsider using a 529 plan for this money. Unless you dont expect your children to attend any higher education, eschewing the tax benefits of a 529 in fear of a 10 penalty which only applies to the gains of the account, principal deposits are not taxed or penalized when withdrawn in the case of a non-qualified distribution doesnt make sense. Over 17 years, you can expect this money to double, at the least, and keeping all of those gains by sheltering them from taxes is significant.Here is some more information about 529s you might find useful:529 savings plans are a state sponsored, tax sheltered, account where money can be deposited and grow tax free as long as the distributions are used for education expenses, which loosely means tuition, books, room and board, school supplies, etc. while the beneficiary is in school any type of higher education, including 4-year university, community college, or even a trade school.Some states provide a tax deduction to their residents to help get their residents to college. Other states dont. To find out if your state has a deduction, go here click on your state, and pay attention to the State tax benefit line.You can invest in any states 529 plan and use the invested money at any institution, in any state, but if your state has a tax deduction, it is normally best to invest in that plan. If your state does not have a tax deduction available, it is best to go with the lowest cost provider. The lowest that I have found is New Yorks 529 which is administered by Vanguard, so you have access to their no-load, low-cost, broad-market index funds, but has only a 25 minimum to start unlike other Vanguard plans which have a 3,000 minimum.If your child gets a scholarship and does not need allsome of the money, they can withdraw allsome of the money penalty free with some paperwork. However, income taxes would still be due on the gains. The principal deposits would not be taxed or penalized when withdrawn.If your child decides not to go to school, they can take a non-qualified distribution by paying income taxes and a 10 penalty on the gains. The principal deposits would not be taxed or penalized when withdrawn. 