What are 529 College Savings Plans?

So, what are 529 college savings plans? The name already gives it away, the 529 plan is a way of saving for college. 529 plans are among the best college savings plans nowadays. But, 529 college savings plans are not the only ways to save for college. Depending on your situation, 529 college savings plans may not be the best way to save for college for you.

Really, what are 529 College Savings Plans?

Each state offers at least one 529 college savings plan to help citizens save for the rising cost of college. It is getting more and more expensive to go to college. What a 529 plan is is a custodial account that you open with any financial institutions. Just go into a financial institution and say that you want to open a 529 college saving plan and they will have you fill out the paperwork and get you set up in no time.

529 college savings plans are just investment accounts

529 College Savings Plans are really just savings and investment accounts that come with rules in exchange for tax benefits when you use the money in it for further education such as for college. 529 College Savings Plans are similar to saving for retirement in an IRA.

What happens in 529 College Savings Plans?

Unlike ordinary bank account or even a regular investment account, you choose how your money in the 529 College Savings Plans will be invested. For example, you can have the 529 College Savings Plan manager manage your portfolio aggressively or conservatively. You usually have no say in how to invest your funds. The goal of the 529 College Savings Plans is to help you save for college so when opening the 529 College Savings Plans you need to specify when you would need the money and how risky you want the funds managed.