Fidelity Investments® Cuts Expenses for 529 College Saving Plan Index Portfolios By Up to 52 Percent

Fidelity 529 Index Portfolio offering among most affordable in industry

  • College Planning
  • 529 Plan
  • College Planning
  • 529 Plan
  • College Planning
  • 529 Plan

BOSTON — Fidelity Investments® has announced a reduction in total asset-based fees for Fidelity Index Portfolios within Fidelity managed direct-sold 529 plans. Fees will now range from 0.11 percent to 0.20 percent, depending on the investment portfolio. This 30-52 percent decrease makes Fidelity 529 Index Portfolio expenses among the very lowest in the 529 college savings plan industry.

This reduction is the result of recent enhancements made to Fidelity's overall index fund line- up, now providing Fidelity's 529 Index Portfolios access to lower priced share classes for underlying mutual funds, as well as a drop in total net expenses on those underlying funds.

"Fidelity recognizes that parents are working hard to save for college, and lower fees mean more of our customers' money can be invested directly toward their children's education," said Keith Bernhardt, vice president of college planning and retirement products at Fidelity. "We are committed to providing a robust menu of investment options that offer great value alongside trusted planning guidance, online tools and educational resources that can help families prepare to meet future college costs."

The index portfolio fee reduction applies to all Fidelity-managed direct-sold 529 plans including The UNIQUE College Investing Plan, Fidelity's nationally distributed plan, offered by the State of New Hampshire; the Massachusetts' U.Fund® College Investing Plan; the Delaware College Investment Plan; and the Fidelity Arizona College Savings Plan. Total fees for the 529 Index Portfolios, including program management and state expenses, now range from 0.11 percent to 0.20 percent of assets, down from 0.19 percent to 0.29 percent. Unlike several competitor plans, all Fidelity direct-sold 529 college savings plans continue to have no annual account fees or low-balance fees.

Fidelity Study Finds Families Utilizing 529 College Savings Plans at an All-Time High

Fidelity research finds that the number of families saving for college is at an all-time high (69 percent), but keeping up with the rising cost of college costs remains a challenge. According to the most recent Fidelity College Savings Indicator Study1, the typical American family is currently on track to cover just 27 percent of their college funding goals by the time their child graduates from high school.

While parents are still behind when it comes to saving to meet their college goals, the 9th annual study found a number of positive steps being taken. Sixty-two percent of families report having a financial plan in place to help reach their college goals (up from 59 percent the previous year). Use of 529 college savings plans is at an all-time high (39 percent), increasing seven percent from last year, and 89 percent of 529 plan owners say they have either increased their savings or continued to save at the same rate over the past 12 months.

"The best step a family can take is to start saving early and regularly," said Bernhardt. "Contributions add up over time – even in small amounts – and saving in a dedicated account, like a tax-advantaged 529 college savings plan, can make a big difference when it comes time to pay for college expenses. Taking time early to talk about college priorities as a family, considering savings strategies, and developing a plan can provide families confidence that they are on the right track to reach their future college savings goals."

Additional Resources to Help Families Save for College

For families looking for assistance at any stage of their college saving process, Fidelity's College Savings Learning Center provides a range of online planning tools and calculators, a broad overview of savings options and strategies, as well as resources to learn more about how to search and apply for financial aid and scholarships. Families can also learn more about Fidelity's 529 online gifting service, which enables owners of Fidelity-managed 529 college savings plans to create a personal college savings webpage for their child or other beneficiary and share a link with family and friends interested in gifting to the account online.

Fidelity offers complimentary access to dedicated college planning representatives, as well as in-person guidance at 193 investor centers nationwide.

About Fidelity Investments

Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.4 trillion, including managed assets of $2.1 trillion as of May 31, 2016, we focus on meeting the unique needs of a diverse set of customers: helping more than 25 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for nearly 70 years, Fidelity employs 45,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

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