The best 529 savings plans of 2025

Coming up with a strategy to pay for higher education can be overwhelming, but a 529 college savings plan can help parents sleep better at night.

A 529 is a state-sponsored education savings account that allows earnings to grow tax-free. Withdrawals are also tax-free as long as the funds are used for qualified educational expenses, like tuition, room and board, books and computers.

While almost every state has a 529, you're not limited to your own state's plan. A family in San Diego can sign up for Utah's My529 plan, for example, or grandparents in Baltimore can open a New Jersey-based NJBEST plan. (Some states do offer additional incentives for residents, however, including Idaho and New York.)

CNBC Select has reviewed dozens of 529 plans based on fees, expenses, investment choices and more. Here are our top picks to help you maximize your returns for your child's future.

For more on how we made our selections, see our methodology.

Formerly known as the Utah Educational Savings Plan, My529 is a direct-sold college savings account available to residents of any state. Account holders can choose risk-based, customizable or age-based portfolios, which automatically rebalance toward more conservative investments as the child nears their college years.

There is no minimum amount to open a My529 and Utah residents are eligible for additional tax benefits.

Illinois' direct-sold Bright Start College Savings Program is managed by TIAA-CREF Tuition Financing. There are age-based investing options, as well as static and individual options from firms like T. Rowe Price and Vanguard.

There is no minimum amount to open a Bright Star account and Illinois residents are eligible for additional tax benefits.

With the CollegeAdvantage (Ohio) 529 plan, anyone can sign up. There's a good mix of investment options (including FDIC-insured accounts), low fees and plans from top companies like Vanguard and Fifth Third Bank.

The minimum contribution amount for a CollegeAdvantage plan is only $25 and Ohio residents may qualify for a tax deduction.

The Michigan Education Savings Program (MESP) offers a mix of Vanguard funds, Schwab ETFs and TIAA-CREF funds. Once you enroll, you can select from risk-based, enrollment year-based or guaranteed investment funds.

The minimum contribution for a MESP is $25 ($15 per pay period via payroll deduction) and Michigan residents are eligible for a tax deduction.

TIAA-CREF manages California's ScholarShare 529 plans, which offer funds from reputable brokerages like T. Rowe Price, Vanguard and Dimensional Fund Advisors. Portfolio options include enrollment-based, multi-fund and single funds.

There is no minimum contribution for ScholarShare plans and California residents are not eligible for a special tax deduction.

Invest529 is a direct-sold college savings plan out of Virginia. It offers low fees, a wide range of investment options and tax benefits for Virginia residents.

The minimum contribution is only $10, among the lowest we've seen for plans that have a limit.

Managed by Ascensus College Savings, NY's 529 College Savings Program is a direct-sold plan offering Vanguard mutual funds at low fees.

There is no minimum contribution to start a NY 529 plan, and New York residents are eligible for a state tax deduction for their contributions.

The Oregon College Savings Plan has both age-based and static portfolio choices featuring a variety of mutual funds.

The minimum initial contribution for an Oregon College Savings Plan is $25 per investment portfolio, with a $5 minimum for subsequent contributions. There is no additional tax deduction for Oregon residents

A direct-sold education savings account from Massachusetts, the U.Fund College Investing Plan is managed by Fidelity Investments and invests in Fidelity mutual funds. There are both age-based and static investing options, as well as an interest-bearing deposit account.

While there's no minimum to open a U.Fund account, there's a minimum $15 per month ( $45 per quarter) contribution with the automatic investment plan.

New Hampshire's direct-sold UNIQUE College Investing Plan is managed by Fidelity Investments and offers Fidelity mutual funds, with both age-based and static options to choose from, including an interest-bearing deposit account.

While there's no minimum to open a UNIQUE plan, there's a minimum contribution of $15 monthly (or $45 per quarter) with the automatic investment plan. New Hampshire residents don't receive a tax deduction.

These plans are designed to help families save for future education expenses. Earnings grow tax-free and withdrawals are also tax-free as long as they're used for qualified educational expenses, including tuition, room and board, books, computers and supplies.

Assets held in a 529 plan aren't weighed as heavily toward your expected family contribution (EFC), meaning the amount you save won't negatively impact eligibility for federal student aid.

Although 529 education savings accounts are traditionally used for covering college costs, depending on the state, they may also be used for tuition to private school from elementary through high school (up to $10,000 per year per student),

Although you can enroll in any state's 529, it's a good idea to investigate your own state's offerings first, in case you are eligible for certain tax breaks. You can browse 529 plans by state here.

You can work with a financial advisor to open a 529 account or choose a direct-sold plan by yourself. Plans sold by financial advisors have higher fees and a pro may select investments that give them a higher commission. If you go the financial advisor route, do your research and ask for 529 account recommendations from trusted friends and family members.

To open a 529 plan yourself, visit the plan's website and fill out an enrollment form. You'll need to provide your full name, Social Security number and the same for your beneficiary. You'll select your investments and fund the account.

You'll be asked how you want to contribute funds, with options including a one-time electronic funds transfer or recurring payments from your bank account or through payroll deductions. Some 529 plans may require a minimum contribution.

So, if you have cash set aside in a high-yield savings account like the LendingClub LevelUp Savings, you could transfer funds via one large lump sum or consistent amounts to a 529 college savings account.

Most 529 plans don't charge a fee to open an account, though many require a minimum initial contribution to begin choosing investments, typically $10 or $25.

There are underlying and administrative fees for maintaining your account. Underlying fees are deducted from the funds you choose within your portfolio, but both are a percentage of the balance in your account.

You can transfer your 529 education savings account to another child, your grandchild or use it for your own qualified educational needs if your child winds up getting large grants or scholarships, or doesn't go to college.

Money in a 529 plan can also be rolled into a Roth IRA account without a tax penalty, up to $35,000. The rules vary by state, so consult with your financial advisor before making this move

You can also roll over the funds to a family member's ABLE account without incurring any penalties. (ABLE accounts are for individuals who are disabled before age 26 and receive Social Security disability benefits.)

Fidelity manages 529 plans for Arizona, Connecticut, Delaware and Massachusetts. It also has its own plan, the UNIQUE College Investing Plan, which is sponsored by New Hampshire but available to investors nationwide.

It's worth noting that cardholders of the no-annual-fee Fidelity® Rewards Visa Signature® Credit Card can earn unlimited 2% cash back on every eligible purchase, which can then be used to fund their Fidelity-managed 529 account if they have one.

The Vanguard 529 College Savings Plan is sponsored by the state of Nevada but can be used by residents of any state. Many other states' 529 plans offer Vanguard investment options (including those on this list). Visit the Vanguard website to see all the states offering Vanguard management and/or investment products.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed financial decisions. Every investment review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of investment products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

To determine the best 529 plans, CNBC Select analyzed dozens of offerings and narrowed it down based on fees, contribution minimums, underlying investments and variety of investment choices.

All of the plans on our list offer funds from reputable companies and investment managers and provide a variety of options to help investors meet their goals.

We focused on the following features:

• Management fees: The plans on our list offer some of the lowest management fees, important since these fees can affect your annual balance. Even a small fraction of a percent in fees can mean thousands of dollars in savings for the investor.
  
• Investment returns: We analyzed returns over a five-year period. Past performance does not guarantee future results, but observing historical patterns may indicate that a portfolio manager is doing their job well.
  
• Fund expenses: We chose plans offering the lowest maintenance fees for their underlying funds. We looked at 529 plans offering more passive investments, such as index funds, with expense ratios as a major deciding factor. These costs also affect the amount investors can save.
  
• Investment options: Having more choices means that parents and guardians can decide how involved they want to be when selecting their portfolios. We looked at 529 plans offering more hands-off choices, such as age-based portfolios as well as individual funds.

Each state's 529 plan has its own minimum contribution. Some may only have minimums for automatic contributions, like payroll deductions. Each state also imposes its own cumulative contribution limit.

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