529 college savings plan

A type of investment plan that allows families to save for future college costs and withdraw investment earnings tax-free to pay qualified expenses, including tuition, room and board and supplies. The future value of an account is based on the performance of the investments chosen for contributions. Many plans offer a variety of investment options, including stocks, bonds and cash reserves. Most 529 savings plans are open to residents of any state. Among college savings options, 529 plans are popular because they offer the greatest combination of high contribution limits, investment flexibility and tax advantages. Source: Vanguard.com