This is 529 Day: What you need to know to help fund your kid's college education, tax-free

By NBC News
Shutterstock/CNNMoney

HOUSTON - Today is "529 Day."  If you don't know what that means, you're not alone. 529 savings plans could help you fund your child's college education, tax-free.

The government-sponsored college savings accounts come with tax benefits.

"Over 30 states offer state tax deduction if you fund a 529 plan in that state," says financial expert Megan Gorman.

Some are offering special promotions for "529 Day."

In North Carolina and Vermont that means the chance to win extra funds for the accounts.

Still, many parents are missing out.  According to investment company Edward Jones the majority of Americans don't understand 529 plans.

"Your plan grows tax deferred, and if your child takes money out of the plan for qualified education expenses the money comes out tax free," Gorman explains.

Parents can use a site such as SavingForCollege.com to find available plans.  Many offer online enrollment and automatic monthly contributions.

Friends and family can also help through a site like GiftOfCollege.com with gift cards to fund a 529 plan.

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