Among college savings accounts, 529 plans have grown to become one of the most popular types because of their tax advantages and the donor’s ability to retain control of the funds even after the student reaches the age of majority. The days of limited investment choices and high sales charges have largely disappeared from this sector. In addition, more states and plans are offering an expanding array of options with minimal fees and expenses.

Of course, some plans have produced better investment results than others, and some states offer greater state tax benefits to add to the federal ones. All the same, it may not always make sense to use the plan offered by your home state, even if a state deduction is available. Here is a list of some of the top-performing 529 plan providers.

Key Takeaways

  • 529 plans provide investors with many tax advantages.
  • They allow donors to retain control of funds even after the student reaches the age of majority.
  • is one of the best sources for comparing the investment returns posted by 529 plan providers.

Investment Performance is one of the best sources for comparing the investment returns posted by 529 plan providers. The site has an organized ranking system that uses rigorous methodology to break down the various types of plans into seven basic asset-allocation categories such as equity and short-term. Rankings encompass more than 3,000 options from both broker-sold to direct-buy programs.

A subset of portfolios that are identical to each other are selected from each plan and then ranked against each other to get a percentile rating, with lower percentile numbers being better than higher ones. Investment returns are then ranked for one-, three-, five- and 10-year periods. The site listed the following top ten plan providers for direct-buy plans for 2020, those sold directly to consumers, by 10-year performance:








Performance Score











South Carolina

FutureScholar 529 College Savings Plan






New York


College Savings Program—Direct Plan








Alaska 529








T. Rowe Price College Savings Plan












Michigan Education Savings Program








U.Fund College Investing Plan






New Hampshire


UNIQUE College Investing Plan






Fidelity Arizona College Savings Plan  


State Tax Deductions

See if your state offers a state-tax deduction for contributions up to a certain level in a 529 plan. As of now, just over 30 states and the District of Columbia do, while seven states offer a benefit to people who contribute to any 529 plan. These states include Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana, and Pennsylvania. For example, Kansas Learning Quest donors can get a deduction of up to $3,000 per year for single filers or $6,000 for married couples filing jointly on their Kansas returns for their contributions.

Some states do not have dollar limits on their contributions, while others allow you to carry excess contributions forward for future deductions—although the amount that can be carried forward varies by state. Some states also impose income limits on donors that prevent those with adjusted gross incomes (AGIs) above a certain level from taking deductions. But this factor should not be the only criteria used to decide which plan is best.

If your state’s plan has poor investment choices and high fees, you will probably be better off forfeiting the state-tax deduction—if there is one—and purchasing a plan elsewhere. Try figuring your tax return with and without the deduction—you may get to see what you will actually gain. A financial planner may be able to help you compare your tax savings to any difference in investment returns to see which is the better choice.

Consult a financial planner to help you compare your tax savings to any difference in investment returns.

Best in Other Areas

Of course, there are other factors to consider when comparing 529 providers. Morningstar profiled four 529 plans in November 2019 which earned the Morningstar Analyst Ratings of Gold.

The first is the BrightStart College Savings Program from Illinois. This is a direct-sold program, which Morningstar says has an "impressive fund lineup, strong plan oversight, and competitive fees." This plan has two different offerings that are age-based, both of which have aggressive, moderate, and conservative tracks.

Virginia's Invest529 Plan is also a top choice because it has strict state oversight. This one is age-based and balances both low-cost index funds with active funds. Residents of the state are able to make a deduction of $4,000 worth of contributions from their income on their state returns.

My529 from Utah gives investors a lot of choices, from age-based tracks that are preset. There are custom options available, and investors can also choose from some stand-alone choices. According to Morningstar, it was the first college savings plan to offer investors age-based choices.

The final plan on the list is from California—the ScholarShare College Savings Plan. This plan has low expenses, giving two age-based options—one passive and the other active. Both reduce their exposure to equities over time.

NerdWallet's review listed TD Ameritrade as the best 529 Plan sponsor for donors who were not eligible for any type of state tax deduction in 2013. The company offers a wide range of investment options, including many for sophisticated investors, along with a rebalancing portfolio that becomes more conservative as the child nears college age. It has low fees and award-winning customer service, as well as a user-friendly online platform.

Special Considerations

And remember, the rules for 529 college savings plans have been expanded. The Tax Cuts and Jobs Act (TCJA) of 2017 expanded plans to allow investors to use funds to pay the annual tuition of K to 12 education of a beneficiary at public, private, or religious schools. Further changes were made following the Setting Every Community Up for Retirement Enhancement Act (SECURE), allowing plan holders to withdraw funds to pay costs associated with a beneficiary's apprenticeship program, as well as to pay down a lifetime maximum of $10,000 worth of qualified student debt.

The Bottom Line

The 529 plan market will likely continue to grow and become more competitive for the foreseeable future. The best plan for you will depend on your state tax rules, your risk tolerance and time horizon, and the amount of professional assistance you require. For more information on 529 Plans, consult your financial advisor or visit the Saving for College website. However, only the site's premium service members have access to rankings of plans sold through brokers and fee-based financial planners.