Considering College Savings? Check Out These Top-Rated Savings Plans for College

Considering College Savings? Check Out These Top-Rated Savings Plans for College

"The 529 college savings plans can offer hefty tax benefits, depending on your state. "

It’s never too early to start saving for your child’s college tuition.  Costs keep going up, financial aid and grants keep going down, and recent graduates are working years just to pay off their student loans.  Even if things are financially tight for you right now, a small contribution to a college savings plan can add up to a significant dent in tuition costs over several years.

Morningstar published reviews of 83 different 529 investment plans, and new this year, there were no plans that warranted a "bottom" rating.  Of the 83 plans rated, the top six spanned Arkansas, Ohio, Maryland, Nevada, Utah and Virginia.  These plans are:

  • CollegeAdvantage 529 Savings Plan (OHIO)
  • CollegeAmerica (VIRGINIA)
  • Maryland College Investment Plan
  • T. Rowe Price College Savings Plan (ARKANSAS)
  • The Vanguard 529 College Savings Plan (NEVADA)
  • Utah Educational Savings Plan

The 529 college savings plans can offer hefty tax benefits, depending on your state.  Currently, all but 12 states offer tax benefits, which are in addition to federal tax benefits, such as tax-deffered growth and tax-free distributions for tuition.  If you have a lot of money to invest, 529 plans can be ideal because they have very high deposit limits, and typically have no income limitations and no age restrictions.

Whether your family is just getting started or you need a tax-free place to send a windfall, 529 savings plans are a financially sound investment that helps secure a strong future for your children.  Education is the single most important key to success in today's more competitive job market.