Picking up Nickels

Wednesday, November 22, 2006

Choosing the Fidelity 529 College Savings Plan index fund portfolio

I've been contributing to Fidelity 529 college savings plans for my children for a few years now and was very pleased to see that they announced fee cuts and a new low cost index fund investment option.

I decided to move to the new age-based index fund portfolio, where contributions are invested in Fidelity index mutual funds and designed for the designated beneficiary’s birth date. Since the 529 plan allows an exchange of existing investments once per calendar year, I wanted to make the exchange immediately to give me some flexibility in 2007 if increased competition causes Fidelity to offer an even more attractive investment option next year.

The exchange process was quite simple:

  • Download form 529 College Savings Plan Investment Instructions from Fidelity.com: link.
  • In Section 1, choose to make your annual exchange and move existing 529 investments to the Age-Based Strategy (Index Series).
  • In Section 2, choose to make all future contributions to the Age-Based Strategy (Index Series).
  • Section 3 (optional) allows you to make an additional contribution to your 529 account.
  • Sign section 4 and mail the completed form to Fidelity at the specified address.

Although increased competition has caused some nice price cuts for investors, I am still disappointed that the Fidelity 529 rewards MasterCard has been discontinued. Win some, lose some...


  • You can add fund to same account using american express fidelity credit card which gives 1.5% back to your account. You can review list of credit cards at http://www.plans529.com/Directory/tabid/145/Default.aspx

    By Anonymous Anonymous, at 12/22/06, 10:12 AM  

  • I think I'll keep using my discontinued Fidelity 529 Mastercard with 2% rebate as long as Bank of America lets me. :)

    By Blogger Frugal Frugalson, at 12/22/06, 12:07 PM  

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