Look at Utah's 529 plan for college savings

Every time I answer one question about 529 college savings plans, two or three more seem to crop up.

I think that's a good thing, because it means people are thinking about this excellent savings tool.

First, the basics. Most states offer their own 529 plans, which are named for the section of tax code that allows them. In this state, we have the Utah Educational Savings Plan, which is consistently ranked as one of the best 529 plans nationwide.

The UESP does not require any minimum deposits or balances, and any adult can be an account owner. If you're a Utah taxpayer, contributing to a UESP account makes you eligible for a state tax credit. Also, the account owner will always control the money, and the funds grow tax-free as long as they are used for qualified higher education expenses.

Now for the questions. Aida sent me an e-mail about a 15-year-old son.

"He has two more years in (high school)," Aida wrote. "Is it better to open a 529 plan or a CD for him at this time?"

Amanda Covington, director of communications for the state Board of Regents, which oversees the UESP, said she could not say which investment would be better, but it is not too late for Aida to open a 529 account.

"We have a lot of people open accounts for children in high school," Amanda says.

"We have different age-based options for investments, so she would be able to choose whether or not she wanted to invest more aggressively or conservatively based on the age of the child."

The next question came from Wayne, who wrote that he has been sending his nine grandchildren, ages 4 to 13, $50 U.S. savings bonds about three or four times per year.

"This is just a gift to them to help them with their education later in life," Wayne wrote.

However, Wayne is wondering whether there is a better investment he could give his grandchildren.

"I have ... been told that the state 529 may work, but my grandchildren are scattered around the U.S.," he wrote. "Please let me know if you have any better ideas of giving an occasional gift."

Amanda says it does not matter where your grandchildren are, Wayne, or even where you reside.