You can use the College Savings Comparison Chart to help determine which plan offers you the most appealing combination of features. While 529 plans such as T. Rowe Price’s College Savings Plan are currently among the most popular college savings vehicles, the right choice for you will depend on your income, financial situation, and other needs.
| 529 Savings Plan | Education Savings Account | UGMA/UTMA Account | Taxable Account | |
| Where can I use my savings? | Can be used at almost all colleges or universities in the U.S. (Some international schools qualify as well.) There are time or age requirements for when assets must be distributed. | Can be used for eligible elementary, secondary, and post-secondary educational expenses. Must be distributed by age 30 unless beneficiary is considered special needs. | Until the child reaches the age of majority, the custodian must use the money for the child. After that, the money belongs to the child. | No restrictions. |
| How are the withdrawals and earnings taxed?* | No federal taxes for withdrawals used to pay qualified educational expenses. Until withdrawal, your account has tax-deferred growth potential. | Any earnings grow tax-deferred, and withdrawals used to pay qualified educational expenses are free of federal taxes. | Above a given level, earnings will be taxed at either the child's or the parents rate. | Taxes apply. Earnings may be taxed as capital gains or ordinary income. |
| What are the contribution limits? | Often $300,000 or more, but depends on the plan. | $2,000 per beneficiary per year. | No limit. | No limit. |
| Who controls the money? | The account holder. | The authorized person controls the account until the child reaches the age of majority. | The money belongs to the child, although it is controlled by a custodian until the child reaches the age of majority. | The account owner. |
| Does my income level affect my ability to contribute? | No. | Your eligibility to contribute begins to phase out depending on your adjusted gross income. | No. | No. |
| Can I change beneficiaries? | Yes. You can transfer assets to another member of the beneficiary's family. | Yes. You can transfer assets to another member of the beneficiary's family. | No. | Not applicable. |
*This chart only addresses federal tax advantages because state tax treatment may vary. Earnings on a distribution that is not used for qualified expenses may be subject to income taxes and a 10% federal penalty.
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