The Best 529 Plans: 5-Cap Ratings

The Savingforcollege.com 5-Cap Ratings provide an independent and objective evaluation of direct-sold and advisor-sold 529 plans. The 5-cap ratings, updated quarterly, help consumers consider their college savings options and choose the best 529 plans. We are pleased to share the top rated plans from our latest quarterly analysis.

About the 5-Cap Ratings

Each 529 plan is evaluated according to Performance, Costs, Features and Reliability. Scores are assigned to each of these factors.

In addition, a Resident Upgrade score reflects any special benefits offered to residents of the plan’s sponsoring state, such as state income tax deductions and tax credits.

Ratings for advisor-sold plans assume that the higher cost structure is justified by the professional advice, due diligence and time savings a financial advisor can provide.

How the 5-Cap Ratings work

Each plan’s category scores and the “Resident Upgrade” score are computed on a scale of 1 to 5. These scores are combined into an overall 5-Cap Rating using a weighted average.

Each plan’s category scores and overall Rating are featured on its Plan Details page, so that investors can choose to use their own weights for each factor, such as historical investment performance, based on their own circumstances and preferences.

Separate scores are calculated for residents and non-residents of each sponsoring state, since many states offer special benefits for residents who invest in their 529 plans. For example, more than 30 states, including the District of Columbia, currently offer a state tax credit or deduction for 529 plan contributions.

It’s important to note that while the scores are calculated using a mathematical formula, a significant portion of the analysis is subjective. The 5-Cap Ratings Methodology also does not assess every aspect of a 529 plan, its management or future investment performance.

Top-rated 529 plans as of March 31, 2021 (Q1)

A plan with a Rating of 5 Caps offers outstanding flexibility, attractive investments, and additional economic benefits (such as generous tax incentives) that can offer a substantial boost in savings for some investors. There are few, if any, weaknesses in these programs.

The 529 plans listed below currently have a resident and/or non-resident rating of 5 Caps. This list is a subset of the complete list of updated 5-Cap Ratings of 529 plans.

Top-Rated Direct-Sold 529 Plans

5-Cap Ratings as of 3/31/21

Top-rated advisor-sold 529 plans

5-Cap Ratings as of 3/31/21