529 Plan FAQs
Find the answers to your questions related to 529 plans and college savings.
How do I choose my investments?1
Fidelity offers a wide range of investment options for your 529 Plan account.
To help you determine which option may be best for you, consider these two questions:
- Do I want a portfolio that's managed for me, automatically becoming more conservatively invested as my child nears college age?
- Do I want to choose my own portfolios?
Age-Based Strategy: Fidelity offers three age-based investment options that adjust their asset allocations automatically, becoming more conservative as the beneficiary nears college age. These options provide access to Fidelity Funds, Fidelity Index Funds, and Multi-Firm Funds.
- Age-Based Portfolios (Fidelity Funds): These are designed to generate returns that attempt to beat a major market index over the long term. These portfolios invest solely in Fidelity funds that are managed by dedicated portfolio managers who are making investment decisions backed by Fidelity's proprietary investment research.
- Age-Based Portfolios (Fidelity Index Funds): These are designed to generate returns that closely mirror the performance of a major market index over the long term. These portfolios invest solely in Fidelity Index Funds, and are able to keep transaction costs and other expenses low because they are passively managed. This means that the securities currently held in the respective index determine your investments.
- Age-Based Portfolios (Multi-Firm Funds): Like our Fidelity Fund Age-Based Portfolios, these are designed to generate returns that attempt to beat a major market index over the long term. While the funds themselves are managed by Fidelity and other firms, the way the investments are spread among different funds is managed by dedicated portfolio managers at Fidelity. This option provides an opportunity to diversify your funds across multiple fund companies.
Custom Strategy: If you want to build your own investment mix, choose from four investment portfolios offered by Fidelity: Static, Individual Fund, Age-Based, and Bank Deposit.
- Static Portfolios invest in several different funds managed by Fidelity and have an asset mix that doesn't change over time. You may choose between portfolios invested in Fidelity Funds or Fidelity Index Funds.
- Individual Fund Portfolios invest in a single Fidelity Fund or Fidelity Index portfolio. Options include a mix of equity, fixed income, money market, and bank deposit portfolios.
- Age-Based Portfolios are managed according to the approximate year the beneficiary is projected to enter college. These portfolios take a more aggressive approach during the early years of saving for college, and becoming more conservative over time as the need to pay for qualified higher education expenses approaches.
- The Bank Deposit Portfolio2 seeks preservation of principal and is designed for beneficiaries of any age. This portfolio is composed exclusively of a deposit in an FDIC-insured, interest-bearing account.3
See investment options for more information.
- Can I change how my account is invested?
Yes. New deposits can be made into any of the portfolios available in the Fidelity-managed 529 plans. Many customers establish standing instructions, such as making all contributions to the same portfolios each period, to avoid providing new instructions with every deposit.
You may reallocate previously invested monies (contributions and earnings) once each calendar year and upon a change to the beneficiary. See investment options for more information.
Use the 529 Plan Investment Instructions Form (PDF) to change instructions on current and future investments.
- Can I pick the investments for my account?
You choose the portfolios, but not the individual funds. The IRS does not allow a participant to have direct or indirect control over the investments in a 529 account. The 529 portfolios are invested in a combination of mutual funds. To see a list of the underlying mutual funds that make up each portfolio, visit the plan performance pages.
- Who are the Fidelity-managed 529 Plan portfolio managers?
The portfolios will be co-managed by Christopher L. Sharpe, CFA, and Andrew J. Dierdorf, CFA.
Christopher Sharpe is a portfolio manager in Fidelity Investments' Global Asset Allocation Division. Mr. Sharpe currently co-manages Fidelity Freedom Index Funds®, Fidelity Income Replacement FundsSM (retail and Advisor classes), Fidelity Freedom Funds®, Fidelity Advisor Freedom Funds®, VIP Freedom® Portfolios, VIP Investor Freedom® Portfolios, VIP Freedom® Lifetime Income Portfolios, Fidelity Freedom® K Funds and Fidelity's 529 College Savings Plans.
Mr. Sharpe joined Fidelity in 2002 as an asset allocation director in the Structured Investment Group of FMRCo. In June 2005, he was named co-manager of Fidelity Arizona College savings Plan. Mr. Sharpe assumed responsibility for the New Hampshire, Massachusetts and Delaware college savings Plans in August 2005.
Prior to joining Fidelity, Mr. Sharpe was an investment policy officer in the Investment Strategy Group with John Hancock Financial Services, Inc. in Boston, where he developed and implemented investment and derivative/hedging strategies to support the company's investment and life insurance products.
Mr. Sharpe received a bachelor of science degree in applied mathematics from Brown University in 1990. A Fellow of the Society of Actuaries and Chartered Financial Analyst charterholder, he is a member of the American Academy of Actuaries and member of the CFA institute.
Andrew Dierdorf is a portfolio manager in Fidelity Investments' Global Asset Allocation Division. Mr. Dierdorf currently co-manages Fidelity Four-In-One Index Fund, Fidelity Income Replacement FundsSM (retail and Advisor classes), Fidelity's 529 College Savings Plans, Fidelity Global Strategies Fund (retail and Advisor Classes), and Fidelity Freedom Funds.
Mr. Dierdorf began managing Fidelity's 529 College Savings Plans in October 2007. He assumed responsibility for Fidelity Four-In-One Index in January 2009 and both the Fidelity Freedom Index Funds and Fidelity Income Replacement Funds in June 2009.
Prior to joining Fidelity in 2004, Mr. Dierdorf worked for CIGNA where he held various actuarial and investment positions.
Mr. Dierdorf received a bachelor of science degree in statistics from the University of Delaware in 1993. He is a Chartered Financial Analyst charter holder, a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries.
Call a college savings representative800-544-2776
1The IRS does not allow participants to have direct or indirect control over the investments in a 529 account.
2Although the underlying deposits are eligible for FDIC insurance, subject to applicable federal deposit insurance limits, the units of the Bank Deposit Portfolio are not insured or guaranteed by the FDIC or any other government agency. You are responsible for monitoring the total amount of your assets on deposit at the depository bank, including amounts held directly at the depository bank. All such deposits held in the same ownership capacity at the depository bank are subject to aggregation and to the current FDIC insurance coverage limitation of $250,000. Please see your 529 Fact Kit for more details.
3Bank Deposit Portfolio is not an eligible investment selection for Trust Account Registrations.
The asset allocation strategy you choose for any Custom Strategy should be based on your investment objectives, risk tolerance, time horizon, and other factors you determine to be important. Different asset allocations offer different balances between risk and potential returns. Generally, the greater the stock allocation, the greater the potential for long-term returns and the greater the risk of volatility, especially over the short term. Conversely, the greater the allocation to bonds and/or short-term investments, the lower the potential for high long-term returns but the lower the short-term risks.
The U.Fund College Investing Plan is offered by MEFA and managed by Fidelity Investments. If you or the designated beneficiary is not a Massachusetts resident, you may want to consider, before investing, whether your state or the designated beneficiary's home state offers its residents a plan with alternate state tax advantages or other benefits.
Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation.
Please carefully consider each plan's investment objectives, risks, charges, and expenses before investing. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view online. Read it carefully before you invest or send money.
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