Though prices on existing bonds fall when interest rates rise, you're unlikely to face losses similar to what a bad year in stocks could generate.
Plus, 529 plans' age-based funds -- invested more conservatively as kids approach college age -- tend to hold bonds with short or intermediate maturities (less than 10 years), dampening possible declines.
Still, says Christine Benz, director of personal finance at Morningstar, if you're nervous about rates and college bills are less than five years out, you could move some of your 529 to a money-market or short-term-bond fund (maturities under five years) in your plan.
|Total returns starting in worst years since 1988||One year later||Four years later|
|Bonds (starting January 1994)||-2.7%||30.4%|
|Stocks (starting January 2008)||-36.5%||-6.3%|
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|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.45%||4.52%|
|15 yr fixed||3.47%||3.55%|
|30 yr refi||4.44%||4.51%|
|15 yr refi||3.46%||3.54%|
Today's featured rates: