Compare College Savings Plans


  Savings accounts Coverdell ESAs UGMA/UTMAs 529 plans

State and federal tax benefits

High contribution limits

Money is invested

Only for eligible education expenses

No income limitations

Controlled by the account owner

Beneficiary change allowed

* *

Upromise® earnings can be swept into your account

* There may be restrictions as to who is eligible.

College savings plan comparison glossary

  • State and federal tax benefits: Tax-advantaged plans generally allow your savings to grow tax-deferred; they’re tax free when used for qualified (allowed) education expenses.
  • Contribution limits: The amount of money you can contribute in one year. The level ranges from $2,000 (Coverdell ESA) to several thousands of dollars in some 529 plans.
  • Investment potential: Your money is invested, so it’s subject to market ups and downs; you could potentially lose principal.
  • Used only for eligible education expenses: Tax benefits are available if funds are used for tuition, room and board, fees, supplies, and other education expenses.
  • Income limitations: Coverdell ESAs are only available to families with certain income levels; after that, contributions are phased out.
  • Controlled by the account owner: If you’re the account owner, you can choose when to withdraw the funds.
  • Able to change beneficiary: If your child decides not to go to school, or if you have funds left over, you can change the beneficiary (within specified limits) to another member of the family.

Information as of September 23, 2016. https://www.consumer.gov/articles/1003-opening-bank-account#!what-to-know (savings accounts); https://www.irs.gov/publications/p970/ch07.html; http://www.finra.org/investors/coverdells-and-custodial-accounts (Coverdell ESAs); http://www.finaid.org/savings/ugma.phtml (UGMA/UTMAs); and https://www.sec.gov/investor/pubs/intro529.htm (529 plans).