This account allows you to make after-tax contributions that grow tax-free until you withdraw the funds to cover approved college costs. Anyone can contribute to this type of savings account.
You can change the beneficiary if the intended recipient decides not to pursue post-secondary education or training.
But is this account the best way for you to save for college? Consider the following:
Eligibility for need-based aid. The money in a 529 plan is considered the student's asset—and can therefore reduce an applicant’s apparent need for financial aid.
Potential for withdrawal penalty. You will pay taxes and a penalty on the withdrawal if you use the money for non-educational purposes.
Other Savings Options For College
When considering your savings options, there are several other strategies that offer flexibility and easy access to your money.
Savings account. A high yield savings account is one of the easiest way to start saving for college. Some savings accounts can be opened with no minimum starting deposit, and you can access your money for whatever purposes you want. Your earnings are not subject to stock market fluctuations. Look for savings accounts that are FDIC insured.
Roth IRA. Even though this account is designed for retirement saving, you can make penalty-free withdrawals to cover qualified higher education expenses. Consult your tax or financial planner before contributing to or withdrawing from an IRA.
Certificates of Deposit (CDs). There is a $2,000 minimum opening deposit for Synchrony CDs. CDs can earn higher rates of interest than many savings accounts. However, withdrawing money before your CD has matured may result in a penalty fee.
Let Synchrony Bank Help You Save for College
Synchrony Bank offers several award-winning savings products to help you save for college. With easy access online or by phone and great customer perks, you can feel confident that Synchrony Bank is working as hard as you do. Our accounts are FDIC-insured up to $250,000 per depositor for each ownership category.
To find the best savings account for your college plans, call Synchrony Bank at 1-844-345-5789 or find us online today.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of .
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.
FDIC INSURANCE: FDIC Insurance up to $250,000 per depositor, per insured bank, for each ownership category.
IDENTITY THEFT RESOLUTION SERVICES are provided by CyberScout™.
AWARDS: Synchrony Bank achieved a five-star rating for 1st Quarter 2014 through 2nd Quarter 2015. Click here to see our Why Us page for details.
NATIONAL AVERAGE: National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. as of 3/01/2017. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. High Yield Savings Rates: Average APYs are based on High Yield Savings Accounts of $10,000. Money Market Account Rates: Average APYs are based on Money Market Accounts of $10,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed. Please click on "Learn More" above for additional disclosures for each product.