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||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.)||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.||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.||No limit.||No limit.|
|Who controls the money?||The account holder.||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.||No.||No.|
|Can I change beneficiaries?||Yes. You can transfer assets to another member of the beneficiary's family.||No.||Not applicable.|