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College Savings Plans

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From savings accounts to 529 plans, there are a variety of college savings plans available to help you reach your goals. Each college savings plan offers its own advantages and considerations. Let’s look at the common options so you can decide what’s right for your family. One thing all college savings plans have in common—Upromise can boost your savings in any plan you choose.

What Are Some Popular College Savings Plan Options?

kids running

Savings Accounts

A savings account with a competitive Annual Percentage Yield (APY) can be a low-risk and flexible way to save for college.


  • Open and maintain your account with ease
  • Use the money for anything, anytime
  • FDIC-insured


  • Lacks the growth potential of a 529 plan or investment-based college savings plan
Mother and baby

529 College Savings Plans

529 college savings plans are tax-advantaged investment accounts operated by a state’s educational authority that offer their own benefits and features.1


  • Open a 529 plan from any state
  • Use the money to pay for qualified education expenses at any eligible school1,2
  • Choose from a wide range of college savings plans


  • Choosing a college savings plan requires some decisions
  • Using money for non-education expenses may incur tax penalties
Child with Dog

Coverdell ESAs

The Coverdell Education Savings Account (ESA) is a college savings plan that allows you to save up to $2,000 a year on behalf of your child under the age of 18.


  • Withdraw savings tax-free for school expenses
  • Use savings to pay tuition at trade schools, private grade schools, etc.


  • Restricted by yearly contribution limits
  • Ability to contribute phases out for families with higher incomes
Young child drawing

Custodial Accounts (UGMA/UTMA)

These accounts are set up by an adult on behalf of a minor under the Uniform Gift to Minors Act (UGMA) or the Uniform Transfer to Minors Act (UTMA). The funds are transferred to the beneficiary when he or she reaches adulthood (the age of majority varies by state but is typically age 18-21).


  • Pay for expenses outside of education


  • Does not offer the same tax advantages as other college savings plans
  • Assets are in the child’s name and may have a larger impact on financial aid

Compare College Savings Plans

  Savings Accounts 529 College Savings Plans Coverdell ESAs Custodial Accounts (UGMA/UTMA)

State and Federal Tax Benefits


Low Impact to Financial Aid


No Contribution Limits


Investment Earnings Potential


For Eligible Education Expenses Only


Boost savings with Upromise


How Upromise Can Boost Your College Savings Plan

No matter which college savings plan you use, Upromise can help you ace your savings with cash back earnings on the things you already do and buy such as booking travel, going out to eat, and shopping online. Request a check and contribute your cash back earnings to any savings account you’d like—or link your eligible 529 college savings plan to have your cash back deposited automatically.3

Don’t miss out on money that can help you save and pay for college.


Support Your College Savings Plan with Upromise.

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Encourage relatives to designate part of your birthday and/or Christmas gift towards college and put it directly into a 529 plan.

- Sarah G., Upromise member

Before investing in any 529 plan, please consider whether your or the designated beneficiary's home state offers its taxpayers benefits that are only available through that state's 529 plan.

1 The availability of tax advantages or other benefits may be contingent on meeting other requirements. Please consult your financial, tax, or other advisors to learn more about how state-based benefits and limitations would apply to your specific circumstance. You may also contact your home state's 529 plan(s), or any other 529 plan, to learn more about those plans' features, benefits and limitations.

2 Earnings on non-qualified distributions are subject to federal income tax and may be subject to a 10% federal penalty, as well as state and local income taxes.

3 Upromise earnings may be swept into 529 plans administered by Ascensus College Savings and is subject to minimum transfer amounts. For more information about 529 plans managed or administered by Ascensus College Savings, please call 1.877.529.29801.877.529.2980 or click here.

The Upromise Mastercard is issued by Barclays Bank Delaware (Barclaycard) pursuant to a license by Mastercard International Incorporated. Mastercard and World Mastercard are registered trademarks of Mastercard International Incorporated.