Just so we don't confuse people who think we're talking in secret code, let me first give a brief explanation. 529s are state-sponsored college-savings plans for parents and others investing money for college-bound students.

Investment options vary. Increasingly, states are turning over management of their 529 plans to big-name investment firms such as TIAA-CREF and Fidelity, which can offer a full menu of stock and bond funds, or age-based portfolios. In the latter case, your annual contributions get invested in a pre-selected portfolio of stocks and bonds. Early on, the portfolio is tilted toward stocks, and as the time for college nears, the weighting automatically shifts toward bonds.

Aside from their low investment minimums (most let you sock away as little as $25 a month), 529s offer some generous tax breaks, provided you use the money for tuition and other qualified expenses. First, money held in a 529 grows tax-free. And beginning in 2002, withdrawals for qualified college expenses will be free of federal income tax. What's more, depending on which plan you choose, you can get state-tax deductions on contributions and exemptions on withdrawals.

Most 529s are open to residents of any state, so you're not limited by where you live, although you may forfeit some tax advantages if you invest out of state. And you can use your 529 money at any college or university.

To select the best plan for you, I suggest you first read the Money feature on 529s, which includes a table listing the features of different states' plans.

Once you've perused this story, you can get additional information by going to the Saving for College.com site where you'll find scads of specifics on the 529 plans offered by each state.