Backer Plans to Match Donations to 529 Accounts This May 29

Backer Plans to Match Donations to 529 Accounts This May 29

Risk Disclaimer >>
Ad disclosure Fintech-Insight stands firm in its mission to facilitate sound financial decisions for you. We forge alliances with specialists to provide the latest in news and facts. Engagement with designated links, sponsored entries, products and/or services, leading transfers to brokers, or promotional content might entail financial recompense for us. We pledge to protect our users from any negative repercussions arising from utilizing our site. Be informed that no content hosted here should be interpreted as authoritative in legal, tax, investment, financial matters or any expert counsel; it is meant for informational purposes exclusively. Should there be any concerns, securing the guidance of an independent financial consultant is recommended.

The social savings platform Backer – who assist parents in creating tax-free college savings accounts for their children, known as 529 accounts – is offering families a dollar-for-dollar match on donations this May 29 – the holiday raising awareness on the huge potential of college savings accounts.

Backer serves on the premise that if saving for college fees is turned into a collaborative process, it will go much further for families of all incomes. Hence why to mark National 529 Day – or May 29 – a holiday dedicated to celebrating investing in the future of the next generation, Backer is offering a $25 match for families who open a new account between May 24 and May 31, 2021. In practicality, this means that for the first $25 contributed monthly into its online savings account, Backer will match it with another $25.

Children who see others investing in their college education are three times more likely to attend college. 529s are the best way for a family to save for their children’s education, however, they are still hugely undervalued and underused: only 16% of parents have a 529 account in place for their child.

Backer’s platform opens a 529 account for families and allows friends and families to transfer into the account in one-off or repeat donations. Because 529s are tax-free investment accounts, the money grows over time. Its collaborative model has already helped families avoid over $50 million in student debt.

A family is far more likely to contribute money themselves if they are gifted a college savings account, which also encourages them to become more college-focused, recent studies suggest. Backer is rethinking the roadblocks to what is usually a complex and bureaucratic process, by opening 529 accounts for its users.

Backer’s platform is also raising awareness of the account’s benefits for lower-income families, pushing back against the stigma that 529s are exclusively for high-income households. Currently, 70% of Backer’s user base have a household income below $100,000, and 50% are non-white.

This May 29, Backer wants families to embrace the power of donating towards our children’s futures. There exists an unfounded stigma against giving money as a gift in the United States, and yet 84% of parents would prefer that type of gift if it was to serve their children’s education.

Putting money into a fund like Backer, where friends and family can donate in a process as simple as using Venmo, is also a way of bringing relatives closer together around a good cause. Two out of every five dollars contributed on the Backer platform comes from grandparents, relatives, and friends of the family, which is 30-times higher than the 529 industry average.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Risk Disclaimer

Fintech-Insight is dedicated to delivering unbiased and dependable insights into cryptocurrency, finance, trading, and stocks. However, we must clarify that we don't offer financial advice, and we strongly recommend users to perform their own research and due diligence.

Leave a Reply