Ugma vs 529 searching

Frequently Asked Questions

How does an UTMA compare to a 529 plan?

A 529 savings plan technically belongs to the person who opened the account, not the child. An UTMA/UGMA is a custodial account, meaning it legally belongs to the child. Basically, this means you (or whoever opens the 529 plan) has control over how funds are used, but the child has more control over how an UTMA/UGMA is used.

What is the difference between UTMA and UGMA?

The main difference between an UTMA and UGMA is what kind of assets they can hold. Assets within an UGMA are limited to bank deposits, stocks, bonds, mutual funds, and other securities and insurance policies. UTMAs allow almost any kind of asset, including real estate to be given to the minor.

Is 529 plan right for college savings?

For most parents looking for a way to save for their child's college education, a 529 college savings plan is a wise choice. That's because the money you invest in one of these accounts grows tax-free if you use the funds toward eligible education expenses. Individual states offer 529 plans.

Is a 529 plan right for You?

529 Plans offer tax advantages, are easy to open and set up, and are managed by investment professionals. Tax advantages of 529 Plans include both federal and state benefits. Your 529 investment can be used at any accredited two year or four year college, vocational school or technical school.

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