The best option for most people is a 529 plan. These accounts, which earn their name from the section of the tax code that created them, are kind of like IRAs for college.What is the best 529 plan?
The best 529 plans: How to maximize saving for college my529 (Utah) Bright Start College Savings Program (Illinois) CollegeAdvantage (Ohio) Michigan Education Savings Program ScholarShare 529 (California)Is a 529 plan right for me?
Though a 529 plan isn't your only choice when it comes to saving for college, it's a smart one to consider. The major drawback associated with 529s is that funds withdrawn for noneducational purposes are subject to a 10% penalty, but that applies to the gains portion of your account only, and not the principal amount you contribute.