USE WHAT WORKS


USE WHAT WORKS

Find the right approach to college savings

Select the features that are important to your clients or choose the investment for more details (see all)

I want control of the assets

I’d like to use the account for something other than college

I want tax-free growth

I want to limit impact on federal financial aid eligibility

I want to be able to change the beneficiary

I want to be able to change investments frequently

529 accounts

Make a selection

  • You control the funds for the life of the account.
  • Funds may only be used for higher education without penalty.
  • Contributions grow tax free, and distributions are tax free for qualified higher education expenses.
  • A parent-owned 529 account reported on the federal financial aid application is assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution.
  • Beneficiary can change to another member of the same family once every 12 months without penalty.
  • Changes to investments can be made twice per calendar year, based on the options available in the plan.

Custodial accounts

Make a selection

  • Child owns the account and controls the funds upon turning 21.
  • Funds may be used for any expenses on behalf of the beneficiary.
  • Up to the first $1,050 in earnings are tax free, the next $1,050 is taxed at child’s tax rate, and earnings over $2,100 are taxed at parents’ rate.
  • Child-owned assets reported on the federal financial aid application are assessed at a maximum 20% rate in determining the student’s Expected Family Contribution.
  • Changes to beneficiary are not allowed.
  • Investment changes can be made at the custodian’s or owner’s discretion at any time.

Mutual funds

Make a selection

  • You control the funds for the life of the account.
  • Funds may be withdrawn at any time, for any reason.
  • Asset growth is subject to taxation.
  • Parental assets reported on the federal financial aid application are assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution.
  • Funds can be used for anyone, for any purpose, without penalty.
  • Investment changes can be made at the owner’s discretion at any time.

Review a wide range of investment options »

These are just some of the features to consider when selecting your college saving options. Each of these plans listed above have different investment and tax advantages and disadvantages, and not all features are listed here. Please see your financial advisor and/or tax professional for advice before making any investment decisions, or call 1-877-PUTNAM529 for more information.

College savings options plans

Select the features that are important to your clients (back to tool)

529 accounts

Custodial accounts

Mutual funds

I want control of the assets You control the funds for the life of the account. Child owns the account and controls the funds upon turning 21. You control the funds for the life of the account.
I’d like to use the account for something other than college Funds may only be used for higher education without penalty. Funds may be used for any expenses on behalf of the beneficiary. Funds may be withdrawn at any time, for any reason.
I want tax-free growth Contributions grow tax free, and distributions are tax free for qualified higher education expenses. Up to the first $1,050 in earnings are tax free, the next $1,050 is taxed at child’s tax rate, and earnings over $2,100 are taxed at parents’ rate. Asset growth is subject to taxation.
I want to limit impact on federal financial aid eligibility A parent-owned 529 account reported on the federal financial aid application is assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution. Child-owned assets reported on the federal financial aid application are assessed at a maximum 20% rate in determining the student’s Expected Family Contribution. Parental assets reported on the federal financial aid application are assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution.
I want to be able to change the beneficiary Beneficiary can change to another member of the same family once every 12 months without penalty. Changes to beneficiary are not allowed. Funds can be used for anyone, for any purpose, without penalty.
I want to be able to change investments frequently Changes to investments can be made twice per calendar year, based on the options available in the plan. Investment changes can be made at the custodian’s or owner’s discretion at any time. Investment changes can be made at the owner’s discretion at any time.

529 accounts

  • You control the funds for the life of the account.
  • Funds may only be used for higher education without penalty.
  • Contributions grow tax free, and distributions are tax free for qualified higher education expenses.
  • A parent-owned 529 account reported on the federal financial aid application is assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution.
  • Beneficiary can change to another member of the same family once every 12 months without penalty.
  • Changes to investments can be made twice per calendar year, based on the options available in the plan.

Custodial accounts

  • Child owns the account and controls the funds upon turning 21.
  • Funds may be used for any expenses on behalf of the beneficiary.
  • Up to the first $1,050 in earnings are tax free, the next $1,050 is taxed at child’s tax rate, and earnings over $2,100 are taxed at parents’ rate.
  • Child-owned assets reported on the federal financial aid application are assessed at a maximum 20% rate in determining the student’s Expected Family Contribution.
  • Changes to beneficiary are not allowed.
  • Investment changes can be made at the custodian’s or owner’s discretion at any time.

Mutual funds

  • You control the funds for the life of the account.
  • Funds may be withdrawn at any time, for any reason.
  • Asset growth is subject to taxation.
  • Parental assets reported on the federal financial aid application are assessed at a maximum 5.64% rate in determining the student’s Expected Family Contribution.
  • Funds can be used for anyone, for any purpose, without penalty.
  • Investment changes can be made at the owner’s discretion at any time.

Review a wide range of investment options »

These are just some of the features to consider when selecting your college saving options. Each of these plans listed above have different investment and tax advantages and disadvantages, and not all features are listed here. Please see your financial advisor and/or tax professional for advice before making any investment decisions, or call 1-877-PUTNAM529 for more information.