Merrill A Bank of America Company Merrill A Bank of America Company Open an account Login Open Menu bar Find answers to common questions at MerrillSchedule an Open an accountwith Merrill Put them on the path to success with a Merrill tax‑advantaged education savings account. Select toOpen an education account Plan for education expenses with a state-sponsored, tax-advantaged college savings plan that offers flexibility and control with high contribution limits. Select toLearn more &bnsp;about 529 Plans Invest on behalf of a minor for any future expense with a taxable custodial account that can be managed by you or by Merrill investment professionals. Select toLearn more &bnsp;about Custodial (UGMA/UTMA) accounts Select toChoose your education account For illustrative purposes only On average, parent income and savings cover about 44% of education costsFootnote6 — find out how much you need to save and build a savings plan to help you get there. Try our College Planning Calculator Merrill Edge Self-Directed was awarded No. 1 Overall Client Experience (for the seventh year in a row) — StockBrokers.com 2024 Annual Broker Review Select toShow StockBrokers.com details Footnote Merrill Edge Self-Directed was awarded No. 1 Overall Client Experience and received an overall rating of 4.5 out of 5 stars from StockBrokers.com. Evaluated as one of 17 online brokers in Go to third-party websiteStockBrokers.com 2024 Online Broker Reviewpopup published on January 23, 2024. StockBrokers.com evaluated brokers using 181 variables across 8 categories. The Overall Client Experience award recognizes the best user experience for typical U.S. retail investors. StockBrokers.com testing simulates dozens of workflows for investors and traders alike. Key criteria include satisfying user intent, design, customer support, platform responsiveness, convenience, workflow, education, marketing communications, and transparency. Go to third-party websiteLearn more about the methodology at StockBrokers.compopup. Rankings and recognition from StockBrokers.com are no guarantee of future investment success and do not ensure that a current or prospective client will experience a higher level of performance results and such rankings should not be construed as an endorsem*nt. Select toHide StockBrokers.com details For illustrative purposes only Select toChoose your education account Select to call888.637.3343 Find accounts built to help you pursue your financial objectives. Select to learn more aboutBusiness RetirementSelect to learn more aboutIndividual RetirementSelect to learn more aboutGeneral Investing Interested in something else? Select toSee all available accounts Expand all Anyone age 18 or older and residing in the United States can open and contribute to an account. When you use your 529 savings to pay for college expenses (or tuition at an elementary or secondary public, private or religious school), you won't pay federal — or often state — taxes on withdrawals, including any earnings. State tax treatment may vary for distributions for primary or secondary education tuition expenses.Footnote4 Certain states may offer state tax or other state benefits such as financial aid, scholarship funds and protection from creditors for investing in their Section 529 plans. Before investing, you should consider whether your home state or your beneficiary's home state offers state tax or other state benefits such as financial aid, scholarship funds and protection from creditors that are available only for investments in such state's 529 plan. Learn more about 529 plans. Anyone including children, grandchildren, nieces, nephews, spouses, friends and even yourself can be named as beneficiaries. You can even set up more than one account for a beneficiary as long as you don't exceed the maximum contribution limit. As the account owner, you can change the beneficiary with no tax consequences at any time.Footnote5 You can choose to manage custodial accounts on your own or have Merrill manage them for you with Merrill Guided Investing. Funds can be used for any purpose as long as it benefits the minor (including college expenses.) Custodial accounts can be funded with cash or securities in a brokerage account or as a managed plan. There's no limit to the amount you can contribute, although gift tax limits do apply. And there's no age limit for making contributions and withdrawals, but the custodian has the responsibility to transfer the assets to the minor upon reaching the termination age. You can contribute up to the annual gifting limits of $17,000 (or $34,000 for couples) annually gift tax-free. In 2023, the first $1,250 of a child's income generally is tax-exempt, the next $1,250 of unearned income generally is taxed at the child's tax rate, and unearned income over $2,500 generally is taxed at the parent's tax rate if the child is under 18, or the child is age 18 and does not have earned income that is more than half of his or her financial support, or is a full-time student who is at least age 19 and under age 24 and who does not have earned income that is more than half of his or her financial support if at least one parent is living at the end of the tax year and the child is not filing a joint return for the tax year. UGMA/UTMA accounts have unique features and requirements that are important to keep in mind. While anyone can contribute on behalf of the minor, the custodian has the obligation to use the assets only for the benefit of the minor. The custodian controls the account until the minor reaches the termination age. It is the custodian's obligation to use the assets only for the benefit of the minor and to turn the assets over to the minor when they reach the termination age. Merrill Edge® Self-Directed may be right for you if you want to make your own investment decisions and monitor your performance independently. Merrill Guided Investing, an Investment advisory program, may be right for you if you prefer having a portfolio built and managed by Merrill investment professionals for a low fee and with a low minimum investment. Merrill investment professionals recommend an investment strategy based on your personal information and financial goals and then build, monitor and rebalance your portfolio. You also get to choose the level of guidance you want — depending on your investment minimum, you can have a professionally managed portfolio online or work one-on-one with an advisor.Footnotes2,3 Please remember there's always the potential of losing money when you invest in securities. Neither Merrill nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. Footnote Preferred Rewards Program Eligibility. You can enroll, and maintain your membership, in the Bank of America Preferred Rewards® program if you have an active, eligible personal checking account with Bank of America® and maintain the balance required for one of the balance tiers. The balance tiers are $20,000 for the Gold tier, $50,000 for the Platinum tier, $100,000 for the Platinum Honors tier, $1,000,000 for the Diamond tier and $10,000,000 for the Diamond Honors tier. Balances include your combined, qualifying Bank of America deposit accounts (such as checking, savings, certificate of deposit) and/or your Merrill investment accounts (such as Cash Management Accounts, 529 Plans). You can satisfy the combined balance requirement for enrollment with either: Refer to your Personal Schedule of Fees for details on accounts that qualify towards the combined balance calculation and receive program benefits. Eligibility to enroll is generally available three or more business days after the end of the calendar month in which you satisfy the requirements. Benefits become effective within 30 days of your enrollment, or for new accounts within 30 days of account opening, unless we indicate otherwise. Bank of America Private Bank clients qualify to enroll in the Diamond Tier regardless of balance and may qualify for the Diamond Honors tier based on their qualifying Bank of America, Merrill and Private Bank balances. Certain benefits are also available without enrolling in Preferred Rewards if you satisfy balance and other requirements. For details on Bank of America employee qualification requirements, please call Employee Financial Services or refer to the Bank of America intranet site. Employees of companies participating in the Bank of America Employee Banking and Investing Program may be eligible to participate on customized terms. Refer to CEBI Program for details. Footnote Please review the applicable Merrill Guided Investing Program Brochure (PDF) or Merrill Guided Investing with Advisor Program Brochure (PDF) for information including the program fee, rebalancing, and the details of the investment advisory program. Your recommended investment strategy will be based solely on the information you provide to us for this specific investment goal and is separate from any other advisory program offered with us. If there are multiple owners on this account, the information you provide should reflect the views and circ*mstances of all owners on the account. If you are the fiduciary of this account for the benefit of the account owner or account holder (e.g., trustee for a trust or custodian for an UTMA), please keep in mind that these assets will be invested for the benefit of the account owner or account holder. Merrill Guided Investing is offered with and without an advisor. Merrill, Merrill Lynch, and/or Merrill Edge investment advisory programs are offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") and Managed Account Advisors LLC ("MAA") an affiliate of MLPF&S. MLPF&S and MAA are registered investment advisers. Investment adviser registration does not imply a certain level of skill or training. Footnote The Chief Investment Office (CIO) develops the investment strategies for Merrill Guided Investing and Merrill Guided Investing with Advisor, including providing its recommendations of ETFs, mutual funds and related asset allocations. Managed Account Advisors LLC (MAA), Merrill's affiliate, is the overlay portfolio manager responsible for implementing the Merrill Guided Investing strategies for client accounts, including facilitating the purchase & sale of ETFs and mutual funds in client accounts and updating account asset allocations when the CIO's recommendations change while also implementing any applicable individual client or firm restriction(s). You may also be able to obtain the same or similar services or types of investments through other programs and services, both investment advisory and brokerage, offered by Merrill; these may be available at lower or higher fees than charged by the Program. The services that you receive by investing through Merrill Guided Investing or Merrill Guided Investing with Advisor will be different from the services you receive through other programs. You may also be able to obtain some or all of these types of services from other firms, and if they are available, the fees associated with them may be lower or higher than the fees we charge. Footnote Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Footnote To be eligible for favorable tax treatment afforded to the earnings portion of a withdrawal from a Section 529 account, such withdrawal must be used for "qualified higher education expenses," as defined in the Internal Revenue Code. The earnings portion of a withdrawal that is not used for such expenses is subject to federal income tax and may be subject to a 10% additional federal tax, as well as applicable state and local income taxes. The additional tax is waived under certain circ*mstances. The beneficiary must be attending an eligible educational institution at least half time for room and board to be considered a qualified higher education expense, subject to limitations. Institutions must be eligible to participate in federal student financial aid programs. Some foreign institutions are eligible. You can also take a federal income tax-free distribution from a 529 account of up to $10,000 per calendar year per beneficiary from all 529 accounts to help pay for tuition at an elementary or secondary public, private or religious school. Qualified higher education expenses now include expenses for fees, books, supplies and equipment required for the participation of a designated beneficiary in an apprenticeship program registered and certified with the Secretary of Labor under the National Apprenticeship Act and amounts paid as principal or interest on any qualified education loans of the designated beneficiary or sibling of the designated beneficiary, up to a lifetime maximum of $10,000 per individual. Distributions with respect to the loans of a sibling of the designated beneficiary will count towards the lifetime limit of the sibling, not the designated beneficiary. Such repayments may impact student loan interest deductibility. State tax treatment may vary for distributions to pay for tuition in connection with enrollment or attendance at an elementary or secondary public, private or religious school, apprenticeship expenses and payment of qualified education loans. Footnote5 The account owner can change the beneficiary to another member of the family of the original beneficiary, without penalty. Please refer to the Internal Revenue Code definition of "member of the family." If assets are contributed from an UGMA/UTMA account, the custodian may not change the designated minor, except as permitted by applicable law. Footnote6 Source: Education Data Initiative, as of April 23, 2022. MAP5504703-04012024 Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF). Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp"). Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp. Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investment products offered through MLPF&S and insurance and annuity products offered through MLLA: Privacy|Security|Glossary|Advertising practicespopupAdvertising Practicespopup © 2024 Bank of America Corporation. All rights reserved. 4326521
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Frequently Asked Questions
Who can open and contribute to a 529 plan?
What are the tax advantages of a 529 plan?
Who can be a beneficiary of a 529 plan?
What are the benefits of a custodial account?
How much can I contribute to a custodial account?
What are the tax advantages of a custodial account?
Are there limits on how funds in a custodial account can be used?
What happens to funds in a custodial account when the child becomes a legal adult?
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FAQs
What is a 529 account with Merrill? ›
Beyond their favorable tax treatment, Section 529 plans are a versatile education planning tool offering families a way to invest for a child's future education expenses (more detailed information on qualified withdrawals can be found in the Education Funding Brochure and the Education Planning Comparison Fact Sheet, ...
What account is best for saving for college? ›529 plans. For most people, a 529 savings account offers a mix of benefits that will help you get closer to your K–12 or college savings goal. With these accounts, you can save money on taxes both when you make your contributions and every year—between now and when you'll need the money.
What is the difference between educational savings account and 529? ›First, the contribution limit for an ESA is only $2,000 per child per year, while there's virtually no limit to 529 plan contributions. And second, with an ESA, you can choose almost any kind of investment—stocks, bonds and mutual funds. Listen up: we like this feature of the ESA.
Who should not use a 529 plan? ›The account beneficiary can make tax-free withdrawals to pay for eligible education expenses. However, a 529 plan may not be the best choice if you're not sure if your child will go to college, how much money your child will need for college or if you like to be more hands-on with your investments.
How do I withdraw money from my 529 Merrill Edge? ›You can request a distribution online by signing into your account at www.merrilledge.com. You must complete this form to request a 529 rollover distribution to contribute to a Roth IRA. This transaction cannot be processed verbally or online. The rollover must be made directly from 529 trustee to Roth IRA trustee.
Is it better to put money in a 529 or savings account? ›Earmarking your money for something specific, like education, can help motivate you to keep saving. But the tax advantages are the main reason 529 plans stand out from regular savings accounts. On top of tax-free growth, some states allow taxpayers to deduct or get a credit for 529 plan contributions on their taxes.
What is the best savings account for children's education? ›A 529 plan is a great way to save for your little one's education, but it isn't the only way. You could put some of your college savings in a 529, some in a traditional savings account, and sprinkle a little more into a Roth IRA.
What is the best way to save for your child's college education? ›- Apply for scholarships. Scholarships are free money for college that your child doesn't have to pay back! ...
- Apply for aid. ...
- Take AP classes. ...
- Get a job. ...
- Open a savings account. ...
- Save money instead of spending it. ...
- Never use student loans. ...
- Choose a cheaper school.
Leave the account intact.
If your child is simply not sure about college or perhaps wants to delay applying, you can keep your 529 plan intact until the child does use it for qualified education expenses.
It's easy to see why Americans don't embrace 529 plans. They often have limited investment options, high fees, complicated rules and anxiety-producing investment risks. All that said, the plans may ultimately be worthwhile for most families, as long as parents choose carefully. Focusing on fees is crucial.
What is better than a 529 plan? ›
Some 529 alternatives include using a custodial account, Roth IRA or Coverdell Education Savings Account.
Which state has the best 529 plan? ›- New York's 529 College Savings Program – Direct Plan. 5.0. ...
- U. Fund College Investing Plan (Massachusetts) ...
- UNIQUE College Investing Plan (New Hampshire) 5.0. ...
- Bright Start Direct-Sold College Savings Program (Illinois) 5.0. ...
- Ohio's 529 Plan, CollegeAdvantage – Direct Plan. 5.0. ...
- Oregon College Savings Plan.
Once your income is over $110,000, unfortunately you cannot contribute to a child or grandchild, or other family member's Coverdell ESA. If you're married and filing jointly, and your MAGI is between $190,000 and $220,000 the contribution limits decrease and as you reach $220,000, you cannot contribute to a CESA.
Is it better to have a 529 for each child? ›Plus, some kids delay attending school for 1-2 years, which could hinder your financial planning. Having multiple 529 plans gives each of your children access to money in their account regardless of whether their siblings are in school.
Is it a good idea to invest in 529? ›And when you pull the funds out, as long as they're used for qualified higher education expenses, there's no federal income tax on the distribution and often no state income tax. 529 accounts also receive some favorable treatment for financial aid purposes, so they're really a great way to save for college education.
What is the difference between a 529 and brokerage account? ›529 Plan. The primary benefit of 529 accounts is that they often offer tax advantages when used for your child's educational expenses. Unlike 529 plans, custodial brokerage accounts are generally offered by financial companies (investment brokerages) & come with few limitations.
What is a 529 savings account used for? ›A 529 college savings plan is a state-sponsored investment plan that enables you to save money for a beneficiary and pay for education expenses. You can withdraw funds tax-free to cover nearly any type of college expense. 529 plans may offer additional state or federal tax benefits.
Is a 529 or brokerage account better? ›If you are looking for a tax-advantaged way to save for college, a 529 plan may be a good option. A brokerage account may be a better choice if you are looking for more investment options and flexibility.