Is a 529 plan a savings account?

Only savings accounts are insured by the FDIC, and the securities in your 529 are not insured against loss in value. Both 529 plans and savings accounts are designed to help you save, but a 529 plan is specifically geared toward saving for college.

Can I stash my savings in a 529 plan?

Two accounts you can use to stash your savings in are 529 plans and savings accounts. Since a 529 plan is designed to help you pay for college, it offers different benefits than a traditional savings account. At the same time, a savings account offers more flexibility over your savings, and can be used for any purpose.

Can you save for college with a 529 plan?

In addition to a 529 plan or savings account, you could also save for college using a Coverdell Education Savings Account (ESA). With this type of account, you can contribute up to $2,000 per year, per beneficiary until they reach age 18. Withdrawals for qualified education expenses are tax-free, but there’s a catch.