Investing in a 529 plan is a great way to save for college, and Fidelity is one of the leading 529 plan providers. The program manager of a 529 plan is typically an investment manager, such as Vanguard, Capital Group’s American Funds and Fidelity Investments. In the fourth quarter of 2022, 15.1 million accounts invested $388 billion in assets in 529 education savings plans, with 900,000 accounts investing $23 billion in Fidelity’s plans.
When it comes to choosing investments, there are several options with Fidelity’s 529 plans. Those with a Fidelity 529 plan can invest in stocks, bonds, mutual funds and real estate investments. They can also open a 529 plan at a retail firm and choose how to invest their money in stocks, bonds, or funds. As with savings accounts, there are a variety of ways to invest, ranging from actively managed funds to index funds and exchange-traded funds (ETFs).
Fidelity offers a variety of funds to choose from and provides choice (active, passive, or a blend). For example, Neutral-rated College Savings Iowa 529 Plan offers four risk tracks and Fidelity provides choice (active, passive, or a blend). Fidelity also offers targeted funds, where the asset allocation is based on the age of the beneficiary and the number of years until the plan is expected to be used.
When it comes to fees and commissions, Fidelity offers $0 for stocks, ETFs, options, and some mutual funds. There is also no account minimum. Those who choose to invest with Fidelity also get access to a variety of tools and resources, such as retirement calculators, tax and investing advice, and a portfolio review.
One of the great features of the Fidelity 529 plan is that you’re allowed to change investment choices twice each calendar year. This means you can move some of your money into a low-risk option within the 529 plan, such as a money-market, if you’re worried about the market’s volatility.
Fidelity also offers a variety of plans for those who don’t want to actively manage their investments. For example, in this group, each plan typically follows one glide path but may provide choices. Plans managed by Fidelity, such as Massachusetts’s U.Fund College Investing Plan, automatically adjust the asset allocation as the beneficiary’s age increases.
In conclusion, investing in a Fidelity 529 plan can be a great way to save for college. There are a variety of investment options and resources available, as well as the ability to change investment choices twice a year. With no account minimum and $0 in fees and commissions, Fidelity’s 529 plans are a great way to start investing for the future.
