Education Savings Accounts |
The 529 College Savings Plan is an investment account. You can deposit
as much money as you want each year. The account grows based on market
about New York State's 529 College Savings
The Coverdell Education Savings Account (ESA) is an investment account
where the assets are used for college expenses. You can usually set an
account up at almost any brokerage firm or financial institution. It is
similar to the 529 College Savings Plan in that it has investment options
where you decide what to buy and sell in order for your account to
You can withdraw money tax-free as long as you use it for college
The money can be used at schools outside your state of
The plan is open to adults and children so there are no age limits
per grade (account can be for an 18-year-old attending first year at
college or a 48-year-old).
There are plenty of investment options available and you only need
$25 to start.
- No bank account is needed and minimum deposits per
month can be set up automatically.
It provides more investment options than the 529 plan since there
are no restrictions on the kind of investments you can make.
In addition to paying for college, you can make tax-free
withdrawals from your ESA to pay for private elementary and high school
expenses, as well as post-secondary school expenses.
The account is subject to market fluctuations. If the market
declines, your funds will decline, as well.
Can only save post secondary education expenses for specified
person on account.
New York State residents can enroll in 529 plans from other states
but they may not be able to get State tax advantages.
- You can contribute only up to $2,000 a year;
whereas, 529 plans allow you to contribute as much as you like.