Changes to Fidelity UNIQUE College Investing Plan

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% (click here for performance details).

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.

If you enjoyed reading this post, subscribe to the RSS feed.

Popularity: 34% [?]

If you enjoyed reading this post, please consider subscribing to my full RSS feed. You can also subscribe by email to have daily updates delivered right to your inbox.

• Ready to buy stocks/ETF with zero commission? Check out the Zecco review and try Zecco Trading with these Zecco promotion codes to get 10 free trades/month.
• Seeking higher returns for your cash? Take a look at the latest interest rates from leading online banks and find out where to get the most for your money.
• Earn up to 5% cash back from these cash back credit cards while shopping at gas stations, grocery stores, or online.