The Best (and Worst) 529 College Savings Plans for First-Time Parents

If you're a new parent starting to think about saving for your child’s education, a 529 college savings plan is one of the smartest tools available. These state-sponsored investment accounts let your money grow tax-free when used for education — including tuition, housing, and even student loan repayment.

But here's the catch: not all 529 plans are created equal.

What Makes a 529 Plan Great?

Low fees: The less you pay in fees, the more your money grows.

Smart investment options: Good plans offer age-based portfolios that adjust as your child gets older.

Tax benefits: Many states offer a deduction or credit if you use their plan — but not all do.

Do You Have to Use Your State’s Plan?

Nope! You can open a 529 plan in any state. That means if your state’s plan is expensive or poorly managed, you can shop around. In fact, unless your state offers a meaningful tax deduction, it often makes sense to go with a plan from another state that’s better managed and cheaper.

Best 529 Plans (Great for Everyone, Even Out-of-State)

Utah’s my529 – Low fees, tons of flexibility, and top-rated every year. Great even if you don’t live in Utah.

Illinois’ Bright Start – Rock-bottom costs and smart investment choices. Plus, Illinois residents get generous tax perks.

Pennsylvania’s Investment Plan – Managed by Vanguard, low fees, and open to all. PA residents even get a tax break no matter which plan they use.

Worst 529 Plans (High Fees, Low Value)

New Jersey (Franklin Templeton) – High fees and sales commissions. Limited tax benefits.

South Dakota (CollegeAccess 529) – No state tax break and underwhelming investment options.

Wisconsin (Tomorrow’s Scholar) – High-cost advisor-sold plan. State has a better direct-sold option (Edvest).

Bottom Line for Parents

If you're just getting started, pick a low-cost, direct-sold plan (meaning you don’t go through a financial advisor). Utah, Illinois, and Pennsylvania offer some of the best options nationwide. Even if your state offers a small tax break, it might be worth more to invest where fees are lowest and performance is strongest.

Want to start saving? You can open most 529s online in under 15 minutes — no financial degree required.