The cost of a college education can be staggering. According to the College Board, the average cost of a year at a four-year public university was $7,020 for the 2009-10 school year. A year at a private university averaged $26,273.

Parents who hope to send their kids to college need to put together a specific savings plan–and choose the right savings accounts.

Basic savings accounts and money market accounts aren’t earning very high rates these days. Many parents use 529 plans for future education costs. The 529 savings plans have several investment choices that can result in greater returns than basic savings accounts.

Among the benefits of 529 savings plans are:

• You may be able to deduct contributions to the plans on federal and/or state returns
• You control how funds are used, even if they are intended for your kids’ use
• You can change the beneficiary if one of your kids doesn’t go to college
• Deposits for each beneficiary can be up to $300,000 or more in some states

Do your research to compare 529 savings plans in different states. You are not limited to opening an account only in your state of residence. You can even open savings accounts in more than one state if you want.

Whether you are just starting out in the work force or have been working for many years, it’s important to allocate a portion of your earnings to a savings plan. Paying yourself the same as you would any other bill is one way to make sure you put away enough money to build a nest egg.

Putting together a budget that includes your savings goal is the best way to force yourself to stick to the plan. Each week or month when you pay bills, write a check to yourself to be deposited into a savings account or money market. Either physically write the check or have a portion of your paycheck direct deposited into a money market or savings account.

Your savings plan should not be an afterthought. It’s important to set specific savings goals and adjust your spending to meet them.

If you currently have a lot of debt that needs to be be repaid, it may make sense to hold off on an aggressive savings plan. Focus on putting  any extra money you have toward your debt first. Once you’ve paid off the debt, redirect those payments toward a savings plan. You can look for savings accounts, money markets, and certificates of deposit to find the best place to stash you cash.

Corridor State Bank has a 1-year certificate of deposit (CD) with an annual percentage yield (APY) of 1.55%. The bank has CDs for other terms that include:

• 1% APY for 6 months
• 1.25% APY for 9 months
• 1.9% for 18 months
• 2.1% for 24 months
• 2.3% for 36 months
• 2.6% for 48 months
• 2.9% for 60 months.

The bank also has a special CD rate of 2.05% for 19 months. The CD rates are fixed but can increase depending on the maturity of the CD. Other features of the CDs include:

• Minimum deposit
• Automatic renewal
• Tiered interest rates for larger deposits

There is no penalty for early withdrawal in the event of death or medical emergency. In other situations the amount of the early withdrawal penalty depends upon the term of the CD. The penalty for withdrawing CDs up to 6 months is 182 days interest on the amount withdrawn subject to penalty. CDs with terms of 7 to 12 months may be charged six months of interest as a penalty.  Accounts with terms of 13 to 35 months may have a penalty equal to 12 months interest.

Corridor State Bank is based in Coralville, Iowa. You can open an account in person or mail in the application at the bank’s website.

American Express has a high yield savings account with a 1.3% annual percentage yield (APY). The savings account includes:

• No minimum balance requirement
• No monthly fees
• Up to six withdrawals each month

The high yield savings account has a variable savings rate.  The 1.3% savings rate is as of April 6, 2010.

You can link up to three external accounts to the American Express savings account and other personal accounts. The most you can deposit each day via an electronic transfer is $250,000. Electronic deposits are usually available for use after six business days if they are initiated through American Express. If you deposit a check, the funds are usually available in 11 business days.

Interest is compounded daily and begins to accrue on the day funds are deposited. Interest is credited to the savings each month.

Deposits in savings are insured by the Federal Deposit Insurance Corp. for up to $250,000 through Dec. 31, 2013.

American Express also offers certificate of deposit (CD) rates for terms ranging from six months to five years. CD rates include:

• 1% APY for six months
• 1.5% APY for a year
• 1.65% APY for 18 months
• 2% APY for two years
• 2.25% APY for three years
• 2.5% APY for four years
• 2.95% for five years

CDs are subject to a penalty fee for early withdrawals.

A recent survey by the Federal Deposit Insurance Corp. (FDIC) found that about 9 million U.S. households (7.7%) don’t have a savings or checking account.

The survey also found that 17.9%, or 21 million households, are underbanked, which means they have bank accounts but regularly rely on alternative financial services such as payday lenders.

People who are underbanked have used nonbank money orders, check-cashing services, pawn shops, or rent-to-own agreements at least once or twice a year. They also have used refund anticipation loans at least once over the past five years.

Certain racial and ethnic populations are more likely not to have savings or checking accounts, or to be underbanked, according to the study. According to the survey, approximately 21.7% of African-Americans, 19.3% of Hispanics, 15.6% of American Indian/Alaskans, 3.5% of Asians, and 3.3% of Caucasians are unbanked.

The survey also found that 31.6% of African-Americans, 28.9% of American Indians/Alaskans, and 24% of Hispanics are underbanked.

The South has the highest percentage of people who are unbanked and underbanked. Not surprisingly, the lower a household’s income, the more likely it is to be without bank accounts. Households with an income of $30,000 or less make up 71% of unbanked households.

People who are younger and with less education are also more likely not to have bank accounts.