URLhttp://www.kiplinger.com/kipimages/pages/34.jpg

Best 529 Funds

529 funds are quite common in the western world where one can save for future education costs. These are mostly funds which are sponsored by states or educational institutions and have tax benefits. They are technically called ‘qualified tuition plans’. Parents or grandparents who wish to do something for their grandchildren can utilize the benefits of these plans to secure the future of their kin.

Available Choices

Before investing in these funds one must know the options that are available to them. There are basically two types of funds. One is age bases while the other is static. In age based option, the fund will be inclined to growth of the investment and hence stocks will be the primary option under investment. As the person grows and reaches college going age, the fund will be inclined towards conserving capital and investments will primarily be made in bonds and cash. Under the static option the choice of investment in stocks or bonds rests with the plan owner and unless there is an instruction from him, the investment will continue as per the initial request.

Best 529 Funds

  1. College America – Virginia

College America is a 529 student savings plan which is offered by Virginia529 which is an independent agency of the common wealth of Virginia and American Funds. This fund has tax benefits and unlike other 529 plans lets the owner of the plan invest in one or more American funds. This fund has to be managed only by a financial advisor namely ‘Capital Research and Management Company’ which is one of the reputed and oldest investment management firms in USA.

  1. The Vanguard 529 College Savings Plan – Nevada

Vanguard College Savings Plan is one of the low cost providers in the industry which usually end up in more savings. They offer three age based options and have 19 investment portfolios that one can choose from. In order to manage the accounts, they engage top investment professionals. It is easy to invest in these funds as they can be linked to your bank account. They also ensure that personal attention is given to each account and have a highly satisfactory customer service.

  1. Utah Educational Savings Plan

Sponsored by the state of Utah, this is the only plan that is sold directly, in the sense that one can start an account and invest directly. This works well even for a non resident of Utah. Being a nonprofit trust fund, the investments made are subject to market performance and risks underlying with it. There are no guarantees on the returns; however they have FDIC insured investment options.

  1. College Advantage 529 Savings Plan – Ohio

Under this fund, they have 2 age based options and 6 portfolios. The best part of this investment is that you can either choose to manage by yourself or can employ a financial advisor. If one chooses to invest and manage by himself then there is no maintenance cost or enrollment fee, plenty of investment options and comes with tax benefits.

The above mentioned funds are some of the best in the industry. However, none of them come with any guarantee that the saved fund will be sufficient for college tuition fee. All of these funds are subject to market risks and performances. Hence it is best to choose and invest in the right fund with the right amount of money.

Leave a Reply

Your email address will not be published. Required fields are marked *