you are already thinking about your holiday shopping
list, consider this for an idea: a contribution to a 529
college savings plan.
529 gift can pay off big for college students, whether
they are attending school this year or a decade from
now. And thanks to new tools, itís becoming easier to
make such gifts.
the early days, you always needed the account number in
order to make a gift," said Mary Morris, chair of
the College Savings Foundation, a nonprofit that works
to build public awareness about 529 plans, and chief
executive of the Virginia529 College Savings Plan.
now it can be done electronically, "no account
number required," she said.
that your loved ones will be upset about not giving the
usual sweater or trendy toy? Donít be.
2014 study by Fidelity Investments found that 90 percent
of grandparents said they would likely contribute to a
grandchildís college savings fund in lieu of other
gifts if asked.
people funding all sorts of things through crowdsourcing,
asking friends and family to contribute to a 529 plan
has become more acceptable," Morris said.
how do you make it easy for loved ones to contribute?
a website. In the past, you generally had two options.
You could ask for a check and deposit the money into a
529 plan yourself, or send your account information to
friends and family. The first required gift givers to
trust that the money would be put toward college
savings, and the second required you to share personal
a solution, 529 plan sponsors have been rolling out gift
registries and other online tools with minimum
contribution amounts as low as $25.
last year, Fidelity Investments, for example, introduced
the option for 529 account holders to create personal
Web pages through which gifts are made.
website is customizable. You can include a picture of
the child and details, like what she wants to study in
link to the site can then be shared by email, party e-vites,
or Facebook and other social media. When gifts are made,
funds are taken electronically from the giverís bank
account and deposited into the 529 plan.
are no fees, and contributions have been substantial,
averaging just over $450, according to Keith Bernhardt,
vice president of college planning at Fidelity.
saw a spike in the number of people making gifts during
the last holiday season, and we expect the same to
happen again this year," Bernhardt said.
you donít have a Fidelity account, you can create a
website through third-party provider GiftedPath. The
company works with select 529 plans to deposit funds
directly into accounts. If you donít have a
participating plan, the site will send contributions
electronically to you.
free to sign up and create a website, but gift givers
are charged a small fee when making a contribution.
a gift code. Other 529 plans may require you to provide
friends and family with a gift code so that the money is
deposited into the correct account.
other cases, gift givers may still have to print out a
coupon and mail a check to the 529 plan sponsor. An
account number is not always necessary, but they will
need to know the beneficiaryís name and date of birth.
at least that information may be worth it, though.
you can get friends and family to put money in, even
small amounts over time will make a big
difference," Morris said.