The 10 lowest-fee accounts you can use to save for college
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College is expensive.That's why many parents turn to the 529 savings plan, which is a state-sponsored, tax-advantaged investment account open to anyone.
While most of us have heard the words "529 plan," these accounts come with a ton of advantages you may not know about: You can contribute up to $14,000 per year without incurring a gift tax, per child and per donor, and anyone (think aunts, uncles, and grandparents) can contribute, for starters.
Plus, since the plans are state-sponsored, each state runs one or more of its own, and in most cases savers from anywhere in the US are allowed to choose which they prefer. Do note that, "if you don't use your own state's plan, and you live in a state with income taxes, you may miss out on a tax deduction," Michael Egan, CFP and founding partner of financial planning firm Egan, Berger & Weiner, warned Business Insider. "There would have to be a really compelling reason to go outside your own state, like if the other plan had significantly lower expenses and, in net of the tax deduction, you'd still save money."
Speaking of lower expenses: Savingforcollege.com released a list of the 15 529 plans across the US with the lowest fees, based on its 2016 Fee Study. The site analyzed direct-sold plans only (although you can buy some plans through financial advisers, the fee structures tend to be more complicated) and took an average of the fees associated with different investment options in each plan to determine the cost of investing $10,000 over 10 years in the lowest and highest-cost plan options for each. The site cautions that because of factors like state taxes, lowest-fee doesn't always guarantee lowest overall cost — but it's a good place to start.
Scroll down to see which made the top ten. Most are available to anyone, while a few are limited to state residents.
10. UNIQUE College Investing Plan
Cost of investing $10,000 over 10 years:
• Lowest cost options: $135
• Highest cost options: $1,709
9. U.Fund College Investing Plan
Cost of investing $10,000 over 10 years:
• Lowest cost options: $135
• Highest cost options: $1,709
Flickr / Beraldo Leal
8. Delaware College Investment Plan
Cost of investing $10,000 over 10 years:
• Lowest cost options: $135
• Highest cost options: $1,709
See the rest of the story at Business Insider