Answer:
it is a tax free.
Explanation:
A 529 plan is a saving plan in the United States. special made for the students. It is tax-advantaged savings investment which is designed to encourage people to save for the expenses to be needed in the future higher education meant for a designated beneficiary.
Although the contributions from 529 plan is not deductible, but the earnings from the 529 plan is federal tax free and when the money is taken out to pay the expenses for higher education in college, it will not be taxed.
Thus, in this way a 529 plan is more helpful to save money as it is free from tax than a normal savings bank account.
Generally, the 529 plan help you save more money than a traditional savings account because it is a tax free.
This is a saving plan specially made for the students especially for their education.
This plan is a savings investment with a tax-advantaged features that encourage people to save for the expenses to be needed in the future higher education meant for a designated beneficiary.
Hence, the 529 plan help you save more money than a traditional savings account because it is a tax free.
Therefore, the Option D is correct.
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