Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.
We’re in the market for the “best” 529 plan available. I’ll preface this by saying that I’m partial to Vanguard, and primarily looking at fees and investment options — I prefer making my own investment decisions on something like this as opposed to going with an age-based option. I’m also interested in identifying plans with high maximum contribution limits. I should also note that our state does have a plan with state tax benefits, but we exceed the income limits for deducting even a small portion of our contributions. Beyond that, the plan isn’t all that good, so I’m looking elsewhere.
I’ve heard especially good things about the Utah plan, which has five age-based options as well as four static options – not complete flexibility, but I can probably make do with the static options. They assess an administrative fee of 0.25% of invested assets plus
$25 $20 per year (this latter fee is actually $5 $4 per $1000 invested, up to a maximum of $25 $20). In addition to this, investments are subject to Vanguard’s fees, which range form 0.025% to 0.13% for the fund combinations available. This means that the management fees will be less than 0.40% of invested assets per year, not including the $25 flat fee. Oh, and they currently have a maximum contribution limit of $319,000.
From what I’ve seen, this makes Utah look like one of the cheapest and most attractive plans, but I was wondering if anyone out there has specific recommendations as to other programs that we should be looking at…
Update: Illinois has just re-worked their 529 plan, known as BrightStart, to include Vanguard Index Funds as an option (they also have actively-managed Oppenheimer funds). Their expenses are low (a total of 0.20-0.23% for the Vanguard funds plus a $10 annual account maintenance fee) and their investment options look similar to Utah. If you’re concerned about maximum contributions, however, they’re capped at $235,000 in Illinois, considerably lower than what is available in Utah). The new plan was made available yesterday.
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