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College savings
comparison chart

This chart helps you compare the advantages of three popular ways you can save for college.


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CollegeAmerica® 529

A tax-advantaged way to save for qualified higher education expenses.
More on CollegeAmerica >

Coverdell Education Savings Account

Use for qualified expenses for K–12 and higher education.
More on Coverdell ESAs >

UGMA/UTMA

Take advantage of lower tax rates for children with these custodial accounts.
More on UGMA/UTMA accounts >

INCOME LIMITS

None. Anyone can contribute.

INCOME LIMITS

Ability to contribute is phased out for married couples with incomes between $190,000 and $220,000, and for individuals with incomes between $95,000 and $110,000.

INCOME LIMITS

None.

CONTRIBUTION LIMITS

$350,000 per beneficiary.

CONTRIBUTION LIMITS

$2,000 per year per beneficiary.

CONTRIBUTION LIMITS

None.

INCOME TAX TREATMENT

Earnings can grow free from federal tax, and withdrawals for qualified higher education expenses are free from federal tax.

INCOME TAX TREATMENT

Earnings can grow free from tax, and withdrawals for qualified elementary, secondary and higher education expenses are free from federal tax.

INCOME TAX TREATMENT

For children under 19 and for full-time students under 24 whose earned income is less than one-half of their support, the first $1,000 of earnings is tax-free. Earnings between $1,000 and $2,000 are taxed at the child’s rate; earnings above $2,000 are taxed at the parents’ rate.

OVERSIGHT

Owner maintains control of the assets, decides when withdrawals will be made and can change the beneficiary.

OVERSIGHT

Beneficiary may assume control at age of majority — 18 or 21 in most states.

OVERSIGHT

Beneficiary assumes control at age of majority — 18 or 21 in most states.

INVESTMENT FLEXIBILITY

Assets can be changed among funds once each calendar year and when a new beneficiary is selected.

INVESTMENT FLEXIBILITY

Assets can be changed at any time.

INVESTMENT FLEXIBILITY

Assets can be changed at any time, but each transfer usually is a taxable event.

USES

Higher education expenses, such as required books, tuition, room and board and supplies.

USES

Education expenses, including required books, tuition and room and board for kindergarten through high school, college and graduate school.

USES

Any use that benefits the child.

AMERICAN FUNDS INVESTMENT OPTIONS

Most American Funds including American Funds College Target Date SeriesSM in five share classes.†

AMERICAN FUNDS INVESTMENT OPTIONS

Most American Funds, not including target date funds.

AMERICAN FUNDS INVESTMENT OPTIONS

All American Funds except target date funds.

ABILITY TO CHANGE BENEFICIARIES

Yes.

ABILITY TO CHANGE BENEFICIARIES

Yes.

ABILITY TO CHANGE BENEFICIARIES

No.

PENALTIES ON NON-QUALIFIED WITHDRAWALS

Subject to ordinary income tax and a 10% federal tax penalty on earnings.

PENALTIES ON NON-QUALIFIED WITHDRAWALS

Subject to ordinary income tax and a 10% federal tax penalty on earnings.

PENALTIES ON NON-QUALIFIED WITHDRAWALS

Not applicable.

CONTRIBUTION DEDUCTIBLE FROM STATE TAXES

Yes, for Virginia residents.

CONTRIBUTION DEDUCTIBLE FROM STATE TAXES

No.

CONTRIBUTION DEDUCTIBLE FROM STATE TAXES

No.

ROLLOVERS

Allowed once every 12 months or when the beneficiary is changed.

ROLLOVERS

Allowed once every 12 months.

ROLLOVERS

Not applicable.

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‡ Class B shares are available only for exchanges.

Depending on your state of residence, there may be an in-state plan that provides tax and other benefits not available through CollegeAmerica. Before investing in any state’s 529 plan, you should consult your tax adviser. If withdrawals are used for purposes other than higher education, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.


Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors® and sold through unaffiliated intermediaries.