Best 529 Plans of 2025

The best 529 plans can be valuable tools for building college savings. So, if you're looking to save for your child or grandchild’s future college expenses, you’ve likely considered opening one of these tax-advantaged plans. But how do you choose the right one?

529 plans allow a contributor to prepay a beneficiary's qualified higher education expenses at an eligible educational institution or to contribute to an account for paying those expenses. While 529 contributions must be made with after-federal-tax money, your contributions grow free from federal or state tax, making them solid options for education savings. It's no wonder they have been rapidly growing in popularity.

However, 529 plans can vary. To select the best one, you’ll need to choose which type of plan makes sense for you and compare tax breaks, benefits for state residents, fees, contribution options, withdrawal restrictions and investment options between plans. Choosing the right plan can take a lot of research, but it’s worth it. An easy place to start is by checking out the top-ranked 529 plans.

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Best direct-sold 529 plans

Direct-sold 529 plans are issued directly from a state financial institution. If you choose one of these plans, you’ll be responsible for managing your own investments within the plan’s online account portal. For this reason, these plans are usually cheaper than investor-sold plans.

Here are the top 10 highest-ranked direct-sold 529 plans, according to Saving for College.

1. West Virginia – SMART529 WV Direct College Savings Plan
2. Ohio’s 529 Plan, CollegeAdvantage
3. Delaware College Investment Plan
4. Fidelity Arizona College Savings Plan
5. New Hampshire – UNIQUE College Investing Plan
6. Massachusetts – U.Fund College Investing Plan
7. Wisconsin – Edvest
8. California – Scholarshare
9. Alaska – T. Rowe Price College Savings Plan (tie)
10. Alaska529 (tie)

Best advisor-sold 529 plans

Advisor-sold 529 plans are available through an investment firm. These accounts typically charge a higher fee, but financial advisers manage the plan’s investments for you. Some savers feel these accounts are worth the extra cost because of the access to professional investment advice, actively managed investments and flexible portfolios.

Here are the top 10 highest-ranked advisor-sold 529 plans, according to Saving for College.

• Putnam 529 for America
• BlackRock CollegeAdvantage Advisor 529 Savings Plan
• The Hartford SMART529
• John Hancock Freedom 529
• State Farm 529 Savings Plan
• College America
• Franklin Templeton 529 College Savings Plan
• New York's 529 Advisor-Guided College Savings Plan
• Tomorrow's Scholar 529 Plan
• Future Scholar 529 College Savings Plan (Advisor-sold)

529 prepaid tuition plans

Another college savings option worth considering is a 529 prepaid tuition plan. This type of plan lets savers prepay tuition at today’s tuition rates at eligible public and private colleges or universities. According to FINRA, "Most states guarantee that the funds you put into a prepaid plan will keep pace with tuition."

Prepaid tuition plans only cover tuition expenses, unlike 529 plans which cover other qualified expenses, like room and board, books and supplies. You can fund these accounts with one lump sum or through installment payments. Often, these plans must be used within 10 years, or the interest on initial contributions could be lost.

According to Financial Aid Finder, only 18 states offer prepaid tuition plans.

• Alabama***
• Colorado**
• Florida
• Illinois
• Kentucky*
• Maryland
• Massachusetts***
• Michigan
• Mississippi
• Nevada
• Ohio*
• Pennsylvania
• South Carolina
• Tennessee
• Texas*
• Virginia
• Washington
• West Virginia*

* Four states have temporarily frozen their prepaid plan to new investors.

** Colorado has permanently halted enrollment in its prepaid plan, although existing investors will still receive their tuition guarantees.

***Both residents and non-residents are invited to invest it these two prepaid 529 Plans.

529 plans can be part of your estate planning

Investing in a 529 plan is a great way for parents or grandparents to pass down wealth to the next generation. By helping college students graduate with lower or no student debt, you'll give your kids a leg up when it comes to starting their careers. For students interested in lower-income careers like the arts or non-profit work, graduating without debt may mean the difference between pursuing their dream career or slogging through a high-paying job they dislike to pay off debt.

A 529 plan may also jump-start your child or grandchild's retirement savings. They can roll over tax- and penalty-free up to a lifetime limit of $35,000 in a 529 to a Roth IRA opened by the 529 beneficiary for more than 15 years. The roll over is subject to annual Roth IRA contribution limits. What's not to like about this versatile savings tool? (The annual contribution limit is that of the beneficiary, not the parents).

Related Content

• 529 Plans Hit a New Milestone: Why They're So Popular
• This 'Super' 529 Strategy Can Help You Jumpstart College Savings
• Use the 529 Grandparent Loophole to Maximize College Savings
• Three Reasons You Need to Use a 529 Plan (and Two Reasons You Don't)