What’s the best way to save?

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When it comes to saving money for college, there are many options available—each with their own set of benefits. The best option for you depends on multiple factors, like your savings goals, risk tolerance and investment preferences.

MNSAVES may check all the right boxes

529 plans are one of the most popular ways families choose to save for college. Other common methods include Roth IRAs or a standard bank savings account.*


  • Can reduce your MN state taxable income up to $3,000 if married filing jointly
  • Tax-deferred growth
  • Tax-free withdrawals for qualified education expenses
  • Investment options
  • No income restrictions
  • No age restrictions for withdrawals
  • High annual contribution limits

Roth IRA2

  • No state tax deductions
  • Tax-deferred growth
  • Potential Tax-free withdrawals**
  • Investment options
  • Income restrictions
  • Age restrictions for withdrawals
  • Lower contribution limits

Bank Savings Account3

  • No state tax deductions
  • No tax-deferred growth
  • No tax-free withdrawals
  • No investment options
  • No income restrictions
  • No age restrictions for withdrawals
  • High annual contribution limits

Moreover, money saved in a 529 does not disqualify students for financial aid. 529 assets are typically treated as belonging to the parent (or grandparent, etc.) and count less in Expected Family Contribution (EFC) calculations than assets held in the child’s name.

Learn more at https://studentaid.gov/ or check with the schools you are considering.

Why choose MNSAVES

  • MNSAVES offers a tax deduction to Minnesota taxpayers—up to $3,000 for joint filers or $1,500 for single filers.
  • With MNSAVES, any growth you see over time won’t be subject to taxes down the line if used for qualified higher education expenses.
  • MNSAVES savings do not disqualify students from financial aid and count less in Expected Family Contribution than assets held in the child’s name.4

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Have any questions about ways to save for education? We have answers.

MNSAVES compares favorably to other ways to save. A 529 plan can mean more flexibility and growth potential, including:

  • Tax-free qualified withdrawals
  • Minnesota state tax deduction or tax credit
  • Low fees and expenses
  • Easy-to-choose investment options
  • Favorable financial aid treatment
  • Use for a wide range of education expenses and programs—in Minnesota and around the world

Get more details and compare savings options.

No. Your MNSAVES funds can be used at any accredited university in the country—and even some abroad. This includes public and private colleges and universities, apprenticeships, community and technical colleges, graduate schools and professional schools.1 Up to $10,000 annually can be used toward K-12 tuition (per student).1 In addition, your 529 can be used for student loan repayment up a $10,000 lifetime limit per individual.1 Review a list of qualifying expenses and the state tax treatment of withdrawals for these expenses in the Plan Description.


MNSAVES provides a state tax credit or deduction. When you contribute to a MNSAVES account, any earnings are federal and Minnesota income tax-deferred until withdrawn. In addition, withdrawals used to pay for qualified education expenses are free from federal and Minnesota income tax.

Minnesota taxpayers are also eligible for a Minnesota income tax deduction on contributions made to MNSAVES up to $3,000 for married couples filing jointly ($1,500 for individuals filing single per year) or may be eligible for maximum credit amount up to $500, subject to phase-out based on certain federal adjusted gross income thresholds. A Minnesota taxpayer is permitted a deduction or tax credit from Minnesota adjusted gross income for a contribution to an account less any Qualified Withdrawals made during the tax year. Amounts transferred from another 529 college savings plan are not eligible for the Minnesota income tax deduction or tax credit.