Which is better, College Savings Plan 529 or Coverdall Education Savings Account?

What are the benefits and disadvantages of both?

A 529 plan is MUCH MUCH better.

You contribute to a 529 plan and the money grows tax free. When the money is withdrawn and used for higher education purposes, there is no tax paid on the withdrawal.

In a Coverdell account. You contribute to the plan, and the money grows tax deferred. Tax is paid upon withdrawal from the plan.

Another advantage is the contribution limits. The coverdell limits you to $2,000 per year. While, with a 529 plan, you can contribute over $300,000.

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