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20 March, 04:29

Which is a tax-free savings account that can only used

for educational expenses?

O

Federal grants

TES

Merit-based scholarships

Merit-based scholarships

A 529 plan

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  1. 20 March, 05:44
    0
    Option E. A 529 plan

    Explanation:

    A 529 plan refers to an investment account which has been specifically designed for college savings and enjoys the benefit of being at a tax advantage. In other words, A 529 plan is an investment account which offers earnings that are tax-free, and also ensures that withdrawals are tax-free if the funds are for the purpose of education expenses.

    In summary therefore, this plan enjoys a tax-free growth and withdrawals are made for the purpose of higher education.

    A 529 plan is one of the best accounts to use when saving for higher education.
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