Saving for their child’s future is something most parents aspire to, but it’s easier said than done — especially when it comes to saving for college. A traditional 529 college savings plan requires a lot of paperwork and major time investment. Ksenia Yudina’s fintech startup UNest offers an alternative investment vehicle that’s easier to use and more flexible.
- Startup Savants is a business podcast that tells the stories behind up-and-coming startups.
- Ksenia Yudina joins Startup Savants to talk about his fintech startup UNest.
- UNest is a fintech app that simplifies the process of saving for your kid’s future.
The Limitations of 529 Plans
During his interview with Startup Savants, Ksenia said he started UNest because he wanted parents to have an easier way to save for their children’s higher education and other needs.
Many parents turn to 529 plans, which are tax-free investment accounts that can be used for higher education expenses. These plans can be helpful, but they’re also complicated and time-consuming. Another major caveat is that if you use the funds for anything else, there’s a 10% penalty. “That’s a big limitation for a lot of people because they feel like it’s too restrictive,” Ksenia said.
Ksenia worked at Capital Group, the No. 1 provider of 529s and other custodial accounts, before leaving to found UNest. “I was helping a lot of clients … start saving and investing for their children, but the process was super complex and painful for us as financial advisors and for the clients,” she said.
He realized that although there were plenty of financial apps, they seemed to do everything except help parents save money for their children’s future. His friends and clients began “asking for a simple solution to start saving for their kids because they were trying to make a difference and … avoid the student debt that they were exposed to,” she said. “I realized that I need to find a better way.”
An Easier 529 Alternative
The UNest app doesn’t use 529 plans at all. Instead, UNest uses a type of custodial account called a UTMA. A UTMA investment account, like a 529, is federally sponsored and comes with tax benefits. But it has a major advantage: parents can spend the money in the account not just on education expenses but on anything that benefits their children. This gives parents options if their kids end up not going to college.
Ksenia said during his interview that there’s less paperwork with a UTMA account than with a 529. “We have a great partner on the back end who’s helping us with all taxes, communication, all of that stuff, but it’s a much, much easier platform to manage,” she said.
The UNest app can be used for a variety of things. For example, you can receive gifts from family and friends who want to contribute to a child’s account. You also can use the app for investment tips and even earn rewards from major retailers like DoorDash and Disney+. All financial information sent through the app is securely encrypted.
Startup Savants Podcast
The Startup Savants podcast is a business podcast created by The Really Useful Information Company (TRUiC). Listeners can hear the stories behind startups, as told by their founders, that are in the midst of growing their companies.
Ethan, an entrepreneur, and Annaka, a branding expert, host the Startup Savants podcast. They bring disparate skills and life experiences to their interviews, providing listeners with important business insights and a holistic perspective on the startup ecosystem.
Hear from a variety of real startup founders from around the globe and with varying backgrounds, making their startup idea a reality. Learn from experts sharing their industry knowledge on venture capital, securing funding, and more on the Startup Savants podcast.
In his interview on Startup Savants, Ksenia Yudina discusses his journey in founding the fintech startup UNest. The UNest app provides an alternative to a traditional 529 savings plan that’s more flexible and less complicated. It will help parents who thus far have hesitated to start a 529 or have tried and were put off by how daunting that process can be.
You can find the Startup Savants podcast on Apple Podcasts, Spotify, or wherever you listen to podcasts.