I am using Fidelity 529 plan to save for our older daughter’s future education. The investing started nearly four years ago and it’s still going every month now. When I read an article on Morningstar.com yesterday that Fidelity is reducing costs of its direct-sold 529 plans, I was quite happy to hear the news because, as a long-term investment plan that invests mostly in index funds, the cost of the plan is always high on the list of things to consider when selecting a plan. According to the Morningstar article, Fidelity
is slashing fees the most on its direct-sold 529 index portfolios in New Hampshire, Massachusetts, California, Arizona, and Delaware. Fidelity is reducing its program management fee to 15 basis points (0.15%), down from 30 basis points, and the total annual asset-based fees range from 25 – 35 basis points (down from an already reasonable 50 basis points).
The plan I am using is the New Hampshire UNIQUE plan 2024. I haven’t received any email or letter from Fidelity yet, so I don’t know details of exactly what has changed to my plan, but it looks like the total annual asset-based fee is now at 0.39% for the 2024 plan.
BTW, in addition to my regular monthly purchase to the plan, I also make additional contributions by using the Fidelity 529 College Rewards Card which offers 2% cash back for every purchase. The credit card is linked to the plan, so every time the accumulated cash back reaches $50, the money is automatically invested in the 529 plan.
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