A 529 plan is a type of investment account that is specifically designed for saving for education expenses. 529 plans are named after section 529 of the Internal Revenue Code, which establishes their tax benefits. These plans are sponsored by states, educational institutions, and other organizations, and they allow individuals to save money for college or other qualified education expenses on a tax-advantaged basis. Contributions to a 529 plan are not tax-deductible, but the earnings on the investments in the plan grow tax-free, and withdrawals used for qualified education expenses are tax-free. This means that the money in a 529 plan can grow faster than it would in a taxable account, and the tax benefits can help make education more affordable.

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