There’s a lot of money in 529 College Savings Plans – more than $250 billion – for good reason. 529 Plans are a great tax-advantaged way to save for college and grad schools, the cost of which has skyrocketed. Because Washington State will have its own 529 Savings Plan soon, we thought I’d review some key things you should keep in mind about 529 plans.

#1. 529 Savings Plans are not all the same. You can invest in the 529 Savings Plan sponsored by most states. However, the plans vary greatly from state to state. So it pays to compare. The research service Morningstar grades 529 Plans as gold, silver and bronze. Toward the end of each year, they release their ratings. Here are the latest ratings (from October 2015).

#2. 529 Savings Plans have restrictions as well as benefits (see box below). Money in a 529 Savings Plan grows tax-free and there’s no tax on withdrawals, as long as the money is used to pay for tuition, room and board, books and even a computer if that is required by the school. Also, the beneficiaries of 529 Savings Plans can be changed without penalty.

#3. 529 Savings Plans are NOT 529 Pre-paid Tuition Plans. Certain plans – including the GET Plan in Washington State — allow families to prepay for education by buying “units” of tuition at today’s rates. Pre-paid Tuition Plans may be limiting because prepaid units are often not portable between public, private, or out-of-state schools.

By contrast, 529 Savings Plans allow you to keep your options open, contributing as much as you want each year, allowing the investment to grow tax-free and then using the withdrawals to pay for education across the US and even abroad. Here’s where you can verify which colleges are eligible.

#4. The mutual funds you invest in through 529 Savings Plan will greatly determine your return. As with any investment, research the funds that the 529 Savings Plan allows you to invest in. Consider the level of risk and likely returns taking into account your time horizon. If possible, opt to invest in both stock and bond funds in a proportion that takes into account how long you intend to stay invested.

#5. 529 Plan management fees vary widely and can also affect your overall return. Savingforcollege.com does an annual fee study of 529 Plans, the most recent of which was released in February 2016. Fees over a 10-year period range from $1,230 for out-of-state investors in the Montana 529 Plan to zero in fees for the Louisiana 529 Plan, which is managed by the State Treasurer and invests only in bonds and other fixed-income. In general, the trend is toward lower fees, as 529 Plans reduce costs and pass the savings on to investors.

Be sure to find out about the sales fee, if a financial advisor is pitching you a specific 529 Savings Plan. Always ask: “Are you getting a sales commission for directing me to this 529 Plan?”