What you need to know about 529 college savings plans

The college savings plans known by that weirdly random number “529” are hugely popular, and with good reason. A 529 plan:

  • Offers federal and, in some cases, state tax advantages.
  • Has low maintenance costs.
  • Provides tax-deferred growth.
  • Has less of an impact on a student’s financial aid package than money stored in checking and savings accounts.

The savings plans – named after the section of the tax code that authorized them – can be complex, and choosing the one that fits your family can be daunting. Know these seven points before opening a 529.