BOSTON ( MainStreet) -- Across the country, states are offering college savings vehicles known as 529 plans.
Similar to 401(k) plans, the offerings allow money to be invested on behalf of a child's college expenses. Like a retirement plan, contributions benefit from compound interest.
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|Alaska, Maryland and Ohio are among the states with top-rated 529 college-savings plans.
, a leading provider of independent investment research, has issued its annual research study and ratings based on an analysis of the nation's largest 529 plans.
Its mutual fund analysts evaluated the quality of the portfolio of investment options; the investment options' performance; the skill of the options' managers; the stewardship practices of the 529 plan's administration; and the costs associated with the plan. They then assign ratings of "Top," "Above Average," "Average," "Below Average," and "Bottom." 529 plans getting a "Top" rating incorporate the industry's best practices, including solid investment choices at a fair price.
Six plans got "Top" ratings this year: Alaska's T. Rowe Price College Savings Plan and the Maryland College Investment Plan, managed by
T. Rowe Price
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; Nevada's The Vanguard 529 Savings Plan, managed by Upromise; Ohio's CollegeAdvantage 529 Savings Plan, managed by Ohio Tuition Trust Authority; Utah Educational Savings Plan, managed by the agency of the same name; and Virginia's CollegeAmerica, managed by American Funds.
Participants can invest with any of the geographically based and municipally managed plans, although certain tax breaks and incentives may not apply to out-of-state residents.