Your 529 Plan Account is a brokerage account, or investment account, that is administered by a specific state and used only in a savings capacity. This allows your funds to keep their tax-advantaged status while they grow over time. These 529 Plan accounts are often managed by large asset managers such as Fidelity and Vanguard.

A Backpack account is not an investment account. It is a bank account purposefully built to help you use your 529 funds when the beneficiary of your 529 Plan needs it. As you have probably noticed, 529 Plan accounts have a requirement that online withdrawals need to be sent to a bank account in the name of the 529 Plan Account Owner or Beneficiary. This is why the only option to pay a University directly is via physical check. It is also the reason why we have built Backpack; to provide you with a bank account that is specifically designed so to help you manage the complexities of 529, use 529 funds to pay for qualified education expenses directly and not have to commingle 529 funds with your own everyday account.