It’s now possible for friends and family members to donate to a child’s 529 plan via gift cards designed for those plans.

Cards that can only be used to transfer funds to a 529 savings plan are growing in popularity due to convenience and the ability of donors to designate the card solely for educational purposes.

GiftofCollege is a registry for online gifts to 529 accounts. Now the company has just started rolling out plastic 529 gift cards at Toys “R” Us and Babies “R” Us stores. The cards are scheduled to be available nationally on Nov. 7.

By offering the cards at retail locations the company hopes to make it easy for family members to buy cards at the checkout counter in fixed amounts of $25 or $50, or variable amounts up to $500 while purchasing a toy or another gift. 

How it works: The donor goes online or buys a card at a retail outline. Once the card is in the hands of the recipient, he or she needs to go to to register the card and direct funds to his/her 529 plan.

Recipients who have not yet started a plan for their child have to do that first before the money will be released. (For more see Investopedia’s 529 Plan Tutorial.)

Giftofcollege charges a fee ranging from $3.95 to $5.95, depending on the card’s value. Redeeming the card is free so the recipient of a $25 gift card will receive the full $25. 

LEAF College Savings 

A second popular 529 gift card site, LEAF College Savings operates much the same as Giftofcollege minus the retail distribution of plastic cards. 

How it works: Donors go online, select the card and denomination ($25 to $1,000), pay a fee of $2.95 and up depending on value and designate the recipient. Cards can be sent by postal mail or email, or you can print your own.

No information about the recipient except name and address is needed. Once a recipient gets the card he or she needs to go online to register and transfer funds to their existing 529 account. 

Free Options

Other ways for family members to contribute to a 529 plan are free but less convenient. They involve sending a check to the plan administrator. This requires having the account number ahead of time. Some plans also require a deposit slip. A few plans won’t accept third party contributions.

Other plans allow direct online contributions, but may require the parent to initiate the transaction. 

The Bottom Line

If you also want to be popular with the child, especially a young child, consider including a small gift-you-can-enjoy-now along with the card.