Compare Savings Options
Saving for college is challenging enough. With so many options, finding the right savings strategy is crucial. In addition to 529 plans, college savings alternatives include UGMA/UTMA accounts, Coverdell Education Savings Accounts, and Series EE and Series I savings bonds. As you can see from the comparison chart below, a 529 plan offers benefits not typically found in other types of education accounts.
|New York's 529 Advisor-Guided College Savings Program Plan||UGMA/UTMA Custodial Accounts||Coverdell Education Savings Account||Series EE and I Savings Bonds|
|Federal tax-free withdrawals for qualified federal education expenses and K-12 Tuition Expenses of up to $10,000 per beneficiary per year|
|New York State income tax deductions on contributions|
|No age limits on beneficiaries or contributors|
|Flexibility to change beneficiaries|
|Account owner control no matter what the beneficiary's age|
|Assets intended specifically for education|
|Assets removed from estate without losing control1|
|Tax-free accelerated gifting|
|Minimal impact on financial aid eligibility when parent owned|
|No income limits restricting eligibility|
1 Assuming account owner and contributor is the same person.
Q. Can other people contribute to my account?
A. Yes, family and friends can contribute to your existing account or open their own account if they want the tax benefits and control. However, all account balances together for a beneficiary cannot exceed $520,000. After that, accounts can grow only through investment earnings.