529 Savings Plans

529 Basics

A 529 college savings plan, or Qualified Tuition Program, is a tax-free way to save for education expenses. A 529 lets you save money for a child’s education in an individual investment account.

Benefits of a 529 Account

Tax-free growth: This is the biggest plus of a 529. You contribute after-tax money, and it grows free of federal income tax and New Hampshire interest and dividends tax.
Tax-free withdrawals: When you take money out for qualified educational expenses (tuition, fees, books, supplies, room and board), withdrawals are also tax-free.
School flexibility: In New Hampshire, you can use up to $10,000 per year of 529 funds to pay for K-12 tuition. This means you can pay for private or parochial elementary, middle, and high school using 529 funds.
Anyone can contribute: Parents, grandparents, family, and friends can contribute to your child’s 529. Ask them to give the gift that keeps on giving: college!

Downsides of a 529 Account

Educational expenses only: If you use 529 money for non-education expenses, you’ll have to pay federal income tax and New Hampshire interest and dividends tax. You’ll also be hit with a 10% penalty on the money you take out. So you should only open a 529 if you can afford to put aside money for education expenses. Remember, you can take out loans for education but not for retirement!

529 college savings plans are established by states. They are typically managed by an experienced financial institution. You can invest in a New Hampshire 529, or you can choose a different state’s program. Read on to learn about New Hampshire’s 529 options.

The UNIQUE College Investing Plan

The UNIQUE College Investing Plan is New Hampshire’s tax-advantaged 529 college savings plan. It’s open to all U.S. residents. This means parents, grandparents, family, and friends can contribute to a UNIQUE Plan.

Benefits of the UNIQUE Plan

Tax deferred earnings: You don’t have to pay federal income tax on earnings.
Tax-free withdrawals: When you take money out for qualified education expenses, you don’t have to pay taxes.
No minimum initial investment: You can start an account with little or no money in it.
High contribution limit: You can contribute up to $569,123 per beneficiary.
Flexible investment options: You can choose which option works better for you:
- Age-based: Your investments are managed for you. Your investments automatically become more conservative over time.
- Custom: You decide how investments are distributed.
Investment exchanges: Your contributions and earnings may be reallocated twice per year.
Account fees: No annual account maintenance fees and no income restrictions.
Investment expenses: Fees vary, depending on your investment strategy.

Need more information about the UNIQUE Plan and how to open an account? Visit the UNIQUE College Investing Plan at www.fidelity.com/UNIQUE. For plan performance information, please view the most recent UNIQUE College Investing Plan Annual Report.

The Fidelity Advisor 529 Plan

The Fidelity Advisor 529 Plan is also known as New Hampshire’s Advisor-sold 529 Plan. It’s available only through non-Fidelity financial advisors. This plan offers a range of investments using Fidelity Advisor Funds and the Fidelity Government Cash Reserves.

Benefits of the Fidelity Advisor 529 Plan

Tax deferred earnings: You don’t have to pay federal income tax on earnings.
Tax-free withdrawals: When you take money out for qualified education expenses, you don’t have to pay taxes.
No minimum initial investment: You can start an account with little or no money in it.
High contribution limit: You can contribute up to $553,098 per beneficiary.
Variety of investment portfolio options:
- Aged-based portfolios
- Static allocation portfolios
- Individual fund portfolios, and
- Money market portfolios
Investment exchanges: Your contributions and earnings may be reallocated twice per year.
Account fees: The $20 account fee is waived if you sign up for a systematic investment plan. The fee is also waived if the account balance is $25,000 or more.
Investment expenses: Fees vary, depending on your investment strategy.

Please contact Fidelity Investments or your financial advisor for more information about this Plan. For information about the Plan Performance, please view the most recent Fidelity Advisor 529 Annual Report.