Editor's note: This is a transcript of the audio file.
If you're tired of the limited investing options in 529 plans, it's time to consider the ignored stepchild of the college savings universe. I'm Janet Stauble with the Bankrate.com Personal Finance Minute.
Coverdell Educations Savings Accounts have been overshadowed by 529 plans for a long time.
But Coverdells offer major investment flexibility that 529 plans don't. With Coverdells, you can invest in anything from mutual funds, CDs, exchange-traded funds, to individual stocks and bonds.
529 plans are sponsored by state governments, but Coverdell Accounts can be established at almost any bank or brokerage firm, so they often have fewer restrictions than 529 plans.
With Coverdells, the state isn't going to take a piece out of your return as it does with 529 plans.
Less sophisticated investors like 529 plans for their simplicity. But if you're willing to monitor your own investments, a Coverdell Account could be the education fund for you.
To learn more about college finance, visit Bankrate.com. I'm Janet Stauble.