| Savings Comparison Chart | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Topic | 529 Savings Plan | Coverdell ESA | UGMA/UTMA | Series I Bonds | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax Benefits |
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| Is the value of the account excluded from the owner's taxable estate? |
Yes |
Yes |
No |
No |
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| Maximum Investment |
Varies by state. Some states allow lifetime account balances as high as $305,000 |
Up to $2,000 per beneficiary
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No limit |
Up to $30,000 per year |
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| Minimum Investment |
Depends on program, but normally from $25/month
to $50/month, with some managers requiring auto monthly deduction from
bank or payroll |
Varies by provider/investment |
Varies by provider/investment |
$50 per year |
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| Qualified Higher Educational Expenses |
Tuition, fees, books, supplies, room and board, and equipment |
Tuition, fees, books, supplies,
room and board, and equipment. Elementary and secondary education expenses
also qualify |
Any expense |
Tuition and fees only |
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| Financial Aid Treatment |
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Parents assets |
Beneficiary's assets |
Parents' assets if education expenses are
for child. Student's assets if education expenses are for oneself. |
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| Income Restriction | No |
Yes |
No |
No restriction on purchases.
However, income restriction for excluding earnings from federal income
tax |
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| Flexibility | Earnings on non-qualified withdrawals taxed
at distributee's rate plus an additional 10% tax |
Earnings on non-qualified withdrawals taxed
at distributee's rate plus an additional 10% tax |
Money can be withdrawn by the beneficiary
when he/she becomes of legal age. Money can be used for any purpose |
Can be redeemed after 6 months. A 3-month
earnings penalty applies to redemption within 5 years of issuance |
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| Control of Account | Account holder |
Parent or other responsible individual |
Student takes control once
custodianship ends |
Bondholder |
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