Choosing the Best 529 Plan
Which 529 plan works best for your family?
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Let’s take a look at some criteria to consider when researching top 529 plans so that you can determine which are the best 529 plans for your family. Keep in mind, the best 529 plan for your family may not be the best for another. Every situation is different.
Your state plan can be a good bet for finding the top 529 plan for your family, because many states allow for resident benefits like grants, matching contributions, and tax deductions.1 If your state plan does not offer benefits for residents, consider other factors when looking for the best 529 plans for your family like fees, contribution minimums, and investment options.
The best 529 plans should provide you with the best tax benefits. Remember that you can generally enroll in any 529 plan, regardless of where you or your beneficiary lives.2
The best 529 plan for you might be one you can open at your bank or brokerage firm. If your state doesn't offer tax benefits and grants, see if your financial institutions have the best 529 plan for you. Typically, this makes transfers easier, your statements can be consolidated, and you can track your plan’s performance while checking on other accounts.
The best 529 plans for your family should work within your budget. Some plans can be opened and maintained for as little as $25, while other contribution minimums can be as high as $400.
The cost to maintain a 529 plan may be lower than the cost to open it. You might consider asking your family to help you with the initial deposit to open an account, and then manage subsequent contributions with whatever your budget allows.
The best 529 plans shouldn’t include unnecessary fees. Familiarize yourself with a 529 plan’s investment and deposit fees as well as costs to open and maintain the account.
Keep in mind that the best 529 plans aren’t simply the ones with the fewest fees. For instance, direct 529 savings accounts are typically less expensive than advised accounts, but you might be willing to pay a fee to get investment advice.
Once you find the top 529 plan for your family, you’ll need to contribute to it over time. Here are two great ways to do just that:
Contribute to your account regularly
Set up an automatic investment plan. Making small, regular contributions can make a big difference over time.
You can earn cash back on things you already do and buy like going out to eat, online shopping, and travel when you join Upromise. Then you can link your Upromise account to your eligible 529 plan and have those cash back earnings automatically transferred into it.3
Remember, the best 529 plans are the ones that work best for your family. Check out Upromise today, and see how it can help you make the most of your college savings and 529 plan account.