Best Rated Plans Methodology

Best Rated

We assign a rating to each state-sponsored program ranging from one cap (least attractive) to five caps (most attractive). The 5-Cap Rating represents our opinion of the overall usefulness of a state's 529 plan based on many considerations. The Best Rated list includes only direct-sold 529 plans.

The 5-Cap Rating is not strictly a measure of historical returns and it is not a predictor of future investment performance, level of investment risk, or financial solvency of the program funds. For more information on the criteria used in assigning a 5-Cap Rating, clickhere.

Best plan for my state

Some states offer multiple 529 plans. Each one may have different fees, investment options, programs managers, etc. Direct-sold plans in this category are ranked by highest to lowest resident 5-Cap Rating.

Lowest Fees

These direct-sold plans have the lowest total expense ratio based upon a moderate-risk age-based portfolio for a newborn. Some states have different fees for residents vs. non-residents. Non-resident expense ratios for are always used, so please check with your state to see if they offer a resident discount. In the case of plans having the same expense ratio, the plan with the highest non-resident 5-Cap Rating ranks higher.

NOTE: In some cases, a single program manager runs plans in multiple state with the same investment options. In these cases, only one of their plans will be shown.

Best performance

Each quarter analyzes the investment performance figures for thousands of 529 portfolios and ranks the 529 savings plans from best to worst for one-year investment performance, three-year investment performance, five-year investment performance and ten-year investment performance. These direct-sold plans have the best performance based upon a moderate-risk age-based portfolio for a newborn.

NOTE: Certain plans may not have enough performance data to qualify.

Best FDIC Insured

Not all investment options within 529 plans are invested in the stock market. For more conservative investors, some plans offer very low-risk FDIC-Insured or CD options. These direct-sold plans are ranked by the highest yields among those options.