Sootchy aims to help eliminate the student debt crisis, especially for underserved students, by offering tax-advantaged 529 college savings plans augmented by a gifting interface. Parents can open an account online, and the application process takes only a few minutes.
The platform uses a crowdfunding approach to contributions, helping parents leverage their networks of family and friends to make donations quick and easy.
Friends and family can donate to the account at any time, and contributions can be a one-time affair or arranged as automated ongoing deposits.
Sootchy utilizes artificial intelligence to analyze accountholder data and make contribution suggestions. The platform’s AI technology takes a look at past donations and suggests new contribution opportunities to family and friends based on their relationship to the account beneficiary.
Sootchy’s service is so new that is has no customer reviews to its name. It also lacks a Better Business Bureau page and accreditation. But this is common for startups and doesn’t necessarily mean you can’t trust Sootchy.
Sootchy is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). And while it doesn’t directly offer 529 accounts, the accounts it suggests are administered at the state level and offer tax benefits, like deductions and credits.
Before you sign up, review Sootchy’s Customer Relationship Summary on its website for more information on its investment services and legal obligations.
Sootchy isn’t available yet, so we don’t know much about its accounts or how the platform plans to operate. But the use of a crowdfunding system to help parents rally 529 contributions from family and friends has actually been done before.
Collegebacker launched back in 2016 and offers tax-exempt 529 savings plans with customizable gifting pages that can be sent to family and friends through email or Facebook. The platform claims to have raised over $20 million since its inception and charges a monthly advisory fee of $1 to $10 monthly, depending on the level of service you select.
So, is Sootchy worth a look? Well, its proprietary AI technology may help it stand apart from competitors with automated contribution suggestions. And once the platform launches in the fall, parents will have an opportunity to better gauge Sootchy’s features against competitors like Collegebacker.
Those interested in learning more about the platform can sign onto Sootchy’s mailing list from its website.
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Sootchy may help you open and contribute to a 529 account by connecting you to your friends and family for donations. But the service is too new for customer feedback and lacks BBB accreditation.
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