Fidelity UNIQUE College Investing Plan Review
Before I applied for the then Fidelity 529 College Rewards MasterCard (now Fidelity 529 College Rewards American Express Card) back in March, I opened a 529 plan with Fidelity in order to invest the 2% rewards I could earn from the card. The plan I chose was Fidelity UNIQUE 2024 plan (which is also Fidelity’s nationally available plan), sponsored by the State of New Hampshire. In addition to the rewards earned from the credit card, I also put $100 every month into the account. The fund has annual expense ratio of 0.50% and one year return of 9.09%.
Today, I received a letter from Fidelity about some changes to the plan:
- The annual account maintenance fee of $20 has been eliminated;
- Account minimums have been lowered from $1,000 to $50 – or $15 a month with automatic investment;
The elimination of the account maintenance is definitely a welcome change as the $20 is about 1.67% of the total annual contribution. I have another 529 plan with Vanguard which is linked to my Citi Upromise Credit Card. That account, however, continues to charge $20 maintenance fee, though it has a one-year return of 15.94% (I chose Vanguard Aggressive Growth Portfolio for my daughter’s 529). According to a BusinessWeek online article in May, “Vanguard and Upromise charge a premium.”
In 529s where Vanguard teams up with rebate-outfit Upromise to provide administrative services – or where Upromise runs the plan alone – account holders may be paying up to twice as much in fees as their counterparts in other plans with Vanguard funds.
The plan itself has another 0.65% annual plan fees, higher than what Fidelity charged for its 529 plans, though the rebates from Upromise can offset the fees a little bit.
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