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Get Help Comparing 529 Plans

What to look for in a 529 plan comparison

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A 529 college savings plan offers an easy and flexible way to save for college expenses.

When you’re ready to make a 529 plan comparison, it can be helpful to understand what 529 plans have in common, and how they differ.

Things All 529 Plans Have in Common

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Your money is invested and can grow state and federal tax-deferred.1

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When it’s time to use your account’s money, it can be withdrawn tax free if you use it for qualified education expenses.2

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529 plan portfolios are managed by professional investment companies or banks.

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Your student can use the money at any eligible school in any state. However, prepaid plans are typically state specific.

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You can generally open an account in any 529 plan from any state regardless of where you live.3

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Anyone—grandparents, relatives, friends—can contribute to your 529 plan account. Just keep in mind there may be 529 contribution limits.

What to Look at When Comparing 529 Plans

Potential In-State 529 Plan Benefits

A good place to start a 529 plan comparison is by looking at what the plans sponsored by your home state have to offer. 34 states offer tax deductions to residents. Some also offer residents benefits like grants and contribution matching programs.

529 Contribution Minimums

A 529 plan comparison based on minimum contribution limits can help give you a sense of how a 529 plan might affect your budget. Some can be opened for as little as $25, while others may require as much as $400.

529 Contribution Limits

529 plans also have contribution limits. You can contribute to your 529 plan until the total balance reaches the maximum allowed. 529 contribution limits differ by state.

529 Fees

Your 529 plan comparison should also consider the fees involved in maintaining the account. Some have additional investment fees, as well as management fees if your account is managed by a financial professional.

Types of 529 Plans

Check out three common types of plans to look at in a 529 plan comparison:

Plans Direct

Direct-Sold 529 Plans
A direct-sold 529 plan is one you open yourself at a bank or brokerage firm; some even let you enroll online. Almost all states offer at least one direct-sold 529 plan.

Plans Advisor

Advisor-Sold 529 Plans
Advisor-sold plans are sold through a financial advisor who also manages the investments (often for a fee). About 30 states, and the District of Columbia, offer advisor-sold plans.

Money Bag

Prepaid 529 Plans
Prepaid plans let you save and pay for in-state schools at a pre-determined price. Prepaid plans are guaranteed to increase in value at the same rate as college tuition and are tax free if the money is used for school. Many are exempt from local income tax and offer tax deductions on contributions as well. About 15 states offer these plans.

Age vs. Risk-Based Investment Types

Typically, there are two investment portfolios commonly offered with 529 plans. Age-based portfolios progress from aggressive investment options to more conservative ones as the student nears college age. Risk-based portfolios are designed to match the level of risk you’re comfortable with. Some people are comfortable with high-risk investments; others are more conservative.

Learn more at 529 investments

Upromise Can Help Contribute to Your 529 Plan

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When it comes to getting ready for college, the more you can save over time, the better. With Upromise, you can earn cash back for college on everyday purchases. When making a 529 plan comparison, keep in mind that a number of plans allow you to link your Upromise and 529 accounts. Then, the earnings from your Upromise account can automatically be swept into your 529 account.4

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Feel Confident in Your 529 Plan Comparison

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Encourage relatives to designate part of your birthday and/or Christmas gift towards college and put it directly into a 529 plan.

- Sarah G., Upromise member

Before investing in any 529 plan, please consider whether your or the designated beneficiary's home state offers its taxpayers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. Investment objectives, risks, charges, expenses, and other important information are included in each 529 plan's offering statement; please read and consider it carefully before investing in a 529 plan.

When you invest in a 529 plan, you are purchasing municipal securities whose value may vary based on market conditions. Investment returns are not guaranteed, and you could lose money by investing in a 529 plan. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

1 The availability of tax advantages or other benefits may be contingent on meeting other requirements. Please consult your financial, tax, or other advisors to learn more about how state-based benefits and limitations would apply to your specific circumstance. You may also contact your home state's 529 plan(s), or any other 529 plan, to learn more about those plans' features, benefits and limitations.

2 Earnings on non-qualified distributions are subject to federal income tax and may be subject to a 10% federal penalty, as well as state and local income taxes.

3 Some 529 plans (like certain prepaid plans) may have residency requirements; be sure to check with the individual plan before enrolling.

4 Upromise earnings may be swept into 529 plans administered by Ascensus College Savings and is subject to minimum transfer amounts. For more information about 529 plans managed or administered by Ascensus College Savings, please call 1.877.529.29801.877.529.2980 or click here.