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How to Choose the Best 529 Plan for You

Written by Mark Kantrowitz | Updated May 21, 2025

With so many options, many savers wonder how to choose a 529 plan that fits their needs. Saving For College produces 529 plan rankings, based on investment performance, and 529 ratings to help you research and compare plans. But these are only one set of factors to consider in determining the best 529 education savings plan for you. When choosing a 529, your choice should consider your personal situation, including your state of residence, risk tolerance, and investment time horizon.

Ultimately, your goal is to choose the 529 plan that maximizes the funds available for your child’s education.

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Criteria for choosing a 529 plan vary depending on the plan’s characteristics and your family’s needs. Some of the most important criteria for picking a 529 plan include:

  • Performance. What is the annual return on investment? See our quarterly 529 performance rankings to get an idea of average returns over time.
  • Cost. What are the fees, including sales charges and the asset-based expense ratio? Check out the 529 plan fee study for more insight on low-cost options.
  • Reputation. Ratings from an objective and trusted source can help guide you toward 529 plans that stand out among their peers. Saving For College spends thousands of hours each year collecting and analyzing data to rate 529 plans based on criteria that are important to savings success.
  • Tax Benefits. Nearly 40 states provide their residents with a state income tax deduction or tax credit for contributing to a 529 plan. In most cases you must contribute to your own state’s plan, but several states provide this tax benefit for contributions to any state’s 529 plan. You’ll want to research the tax benefits offered by your state before selecting a 529 plan.
  • Plan Type: Direct-Sold vs. Advisor-Sold. Direct-sold 529 plans tend to charge lower fees than advisor-sold 529 plans. Direct-sold 529 plans do not charge sales commissions, while some advisor-sold 529 plans do. On the other hand, using an advisor-sold plan means your financial advisor can help you develop a strategy and manage your 529 investments to meet your college savings goals.
  • Investment Options Offered. 529 plans offer a menu of investment choices. All plans offer age-based or target-year options which are popular with many families. These portfolios shift automatically from more aggressive to more conservative investments as your child nears college age. Most also offer static and multi-fund portfolios for you to choose from. You’ll want to ensure that the plan you choose offers options that meet your risk tolerance level – whether you prefer an aggressive, conservative or balanced approach.
  • Minimum Contributions. The minimum contribution in some states can be as high as $250 to $3,000 (e.g., Alaska, Arizona, Indiana, Montana, Nevada, New Jersey, Ohio, South Dakota, and West Virginia). In other states, the minimum contribution in an automatic investment plan is as low as $15 or $25 per month.

These criteria for selecting the best 529 plan may lead to tradeoffs.

For example, there may be a tradeoff between better performance in an out-of-state 529 plan and a state income tax break for an in-state 529 plan. This tradeoff may vary depending on the number of years until the student enrolls in college, reaching an inflection point when the student starts high school since you will likely want to ensure your college savings are in lower risk (and lower return) funds by that time. Be sure to understand all incentives offered by your state – such as seed contributions, matching contributions, and lower fees for state residents – to help you make the best decision.

Which 529 Plan is Right For Me?

To pick the best 529 plan for you:

  • Consider your own state’s 529 plan and whether your state offers a state income tax break and other benefits for state residents.
  • Research direct-sold 529 plans from low-fee states and 529 plans with top overall ratings.
  • Filter the list of 529 plans based on whether each 529 plan:
    • Offers the investment options you need. Most families choose an age-based portfolio, sometimes called a target-date portfolio, which adjusts asset allocation in your investment portfolio over time.
    • It has minimum contribution requirements you can satisfy.
  • Examine the remaining plans. Pick your home state plan if it offers fees under 0.50% or a state income tax break and your child is in high school.
  • Otherwise, choose the 529 plan with the best combination of high return on investment and low fees.

Saving For College maintains a list of the best 529 plans based on our analyses. You can also review a detailed profile of each state’s 529 plans, including the investment choices offered by each plan, their historical returns, and current fees.

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About the author

Mark Kantrowitz is a nationally-recognized expert on student financial aid, scholarships and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make informed decisions about planning and paying for college. Mark writes extensively about student financial aid policy. He has testified before Congress and federal/state agencies about student aid on several occasions. Mark has been quoted in more than 10,000 newspaper and magazine articles. He has written for the New York Times, Wall Street Journal, Washington Post, Reuters, Huffington Post, U.S. News & World Report, Money Magazine, Bottom Line/Personal, Forbes, Newsweek and Time Magazine. He was named a Money Hero by Money Magazine. He is the author of five bestselling books about scholarships and financial aid, including How to Appeal for More College Financial Aid, Twisdoms about Paying for College, Filing the FAFSA and Secrets to Winning a Scholarship. Mark serves on the editorial board of the Journal of Student Financial Aid and the editorial advisory board of Bottom Line/Personal (a Boardroom, Inc. publication). He is also a member of the board of trustees of the Center for Excellence in Education. Mark previously served as a member of the board of directors of the National Scholarship Providers Association. Mark is currently Publisher of PrivateStudentLoans.guru, a web site that provides students with smart borrowing tips about private student loans. Mark has served previously as publisher of the Cappex.com, Edvisors, Fastweb and FinAid web sites. He has previously been employed at Just Research, the MIT Artificial Intelligence Laboratory, Bitstream Inc. and the Planning Research Corporation. Mark is President of Cerebly, Inc. (formerly MK Consulting, Inc.), a consulting firm focused on computer science, artificial intelligence, and statistical and policy analysis. Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU). He has Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU. He is also an alumnus of the Research Science Institute program established by Admiral H. G. Rickover.

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