FAQs: Getting started
- Opening a NY 529 account
- Who can open a Direct Plan account?
- Who can be the beneficiary of an account?
- Can I open accounts for more than one beneficiary?
- Can different people open separate accounts for the same beneficiary?
- Can I open an account for an unborn child?
- Why do you need ID numbers and birth dates for both me and the beneficiary?
- Who is Ascensus Broker Dealer Services, Inc.?
- Contributing to a NY 529 account
- Can I contribute to more than one 529 plan?
- What if I move to another state?
- Can I move money from an ESA or U.S. savings bond to a 529 plan account?
- Can I move money from another 529 plan to the Direct Plan?
- Why must I include a breakdown of principal and earnings when I move money from another plan?
- Understanding your investments
- Who is Vanguard?
- Are portfolio returns guaranteed?
- When can I change my investment options?
- What if I'd like to allocate part of my investment to a fund or portfolio not listed here?
- What should I know about my investment performance?
- What fees apply?
Opening a NY 529 account
Who can open a Direct Plan account?
Almost anyone! There are no age or income restrictions, and you don't have to be a resident of New York. You must be a U.S. citizen or resident alien with a verified permanent U.S. address (that isn't a post office box) and valid Social Security Number or Individual Taxpayer Identification Number.
Who can be the beneficiary of an account?
The person you're opening the account for (the beneficiary) must be a U.S. citizen or resident alien with a valid Social Security Number or Individual Taxpayer Identification Number.
The beneficiary doesn't have to be related to you and doesn't have to live in New York. You can name yourself as beneficiary and use the money for your own education.
Can I open accounts for more than one beneficiary?
Yes. While there can be only one beneficiary named for each account, you can open separate accounts for different beneficiaries.
Can different people open separate accounts for the same beneficiary?
Yes. For example, a father, mother, grandparent, and uncle can each open a separate account for the same beneficiary and can also open separate accounts for other beneficiaries.
Can I open an account for an unborn child?
No. The beneficiary must have a Social Security Number or Individual Taxpayer Identification Number. However, you could open an account naming yourself as the beneficiary and then change the beneficiary of the account to the child when he or she is born.
Why do you need ID numbers and birth dates for both me and the beneficiary?
The plan is required by federal law to obtain certain personal information about the account owner and the beneficiary that we can use to verify your identities. If you don't provide the requested information, we won't be able to open your account.
If we're unable to verify your identities, the plan reserves the right to close your account or take other steps we deem reasonable. The Social Security Numbers or Individual Taxpayer Identification Numbers of you and your beneficiary are also required for tax-reporting purposes.
Who is Ascensus Broker Dealer Services, Inc.?
Ascensus Broker Dealer Services, Inc., is the program manager for the Direct Plan. Ascensus Broker Dealer Services is part of Ascensus, a leading provider of administrative services for 529 plans.
Contributing to a NY 529 account
Can I contribute to more than one 529 plan?
Yes. Account owners and beneficiaries may have multiple accounts in multiple states.
What if I move to another state?
You can maintain your account and continue to make contributions no matter where you live in the United States.
However, if you're no longer a New York State taxpayer, you won't be eligible to deduct your contributions for New York State income tax purposes.
Can I move money from an ESA or U.S. savings bond to a 529 plan account?
Yes. You can contribute to a Direct Plan account with proceeds from the sale of assets held in a Coverdell Education Savings Account (ESA) or the redemption of a qualified U.S. savings bond (Series EE or I). You'll need to provide the following documentation:
- For an ESA. An account statement or other documentation issued by the financial institution that acted as custodian of the ESA. The statement must show the total amount contributed to the account and the earnings in the account.
- For a U.S. savings bond. An account statement, Form 1099-INT, or other documentation from the financial institution that redeemed the bond. The statement must show the interest paid when the bond was redeemed.
Until we receive this documentation, the entire amount of your contribution will be treated as earnings. If the entire contribution is treated as earnings, there may be adverse tax consequences if any portion of the account is subsequently taken as a nonqualified withdrawal. Please check with your legal or tax advisor about your particular situation.
Note: If you have questions about opening a Direct Plan account with funds from an UGMA/UTMA account, refer to that section on the FAQs: Other common questions page.
Can I move money from another 529 plan to the Direct Plan?
Yes. You may perform a tax-free rollover of a 529 account for the same beneficiary as often as once every 12 months. You may move money by direct rollover (money is transferred directly from your current 529 plan custodian to New York's Direct Plan) or by indirect rollover (you request a check for the amount from the current 529 plan custodian and reinvest it in the Direct Plan within 60 days).
For a direct rollover, check with your current custodian to verify that it will accept our request for a rollover and to determine if any penalties will apply to the transaction.
When you request a direct rollover using either the Enrollment Application (for new accounts) or the Incoming Rollover Form (for existing accounts), you must provide us with a statement from the plan custodian showing the basis and earnings amounts in the 529 account at the time of distribution.
Why must I include a breakdown of principal and earnings when I move money from another plan?
If you don't provide us with a breakdown of the principal and earnings, federal regulations require that your rollover or transfer be treated as 100% earnings. Consequently, you may have to pay taxes on the full amount at the time of any subsequent nonqualified withdrawals.
For direct rollovers, the sending plan is required to provide the Direct Plan with the breakdown generally within 30 days of the money being moved from the previous plan.
Understanding your investments
Who is Vanguard?
Vanguard is the investment manager for the Direct Plan and is one of the world's largest investment management firms. The company is committed to providing a low-cost, wide-ranging choice of investments, including index portfolios, to help Direct Plan account owners save for higher education.
Are portfolio returns guaranteed?
No. Returns are never guaranteed, and your account value will fluctuate with market performance. As with any investment in securities, you can lose money by investing in the Direct Plan.
Keep in mind that the holding period for college investors is short (generally 5 to 20 years), and you should consider investing more conservatively as the time approaches for you to begin making withdrawals.
Note: Before you select an investment option, you should carefully consider your investment time horizon and risk tolerance.
When can I change my investment options?
You can change the investments for your future contributions at any time. Under the federal laws that govern 529 plans, you're able to move money you've already contributed to a different portfolio within your account twice per calendar year or if you change the beneficiary.
What if I'd like to allocate part of my investment to a fund or portfolio not listed here?
The 16 investment options offered by the Direct Plan have been selected specifically for the plan and are the only investment options available.
What should I know about my investment performance?
The returns displayed on this site reflect past performance, are net of the management fee, and are not a guarantee of future performance.
Keep in mind that you don't actually own shares in the underlying funds. Instead, you own portfolio units of the Direct Plan, which means the returns for a particular portfolio may vary from the returns of the underlying funds.
What fees apply?
The plan charges a total annual asset-based management fee of 0.12% of account assets. That means for every $1,000 you invest, you'll pay $1.20 in fees per year.
There are no advisor fees, sales commissions or annual account fees, like those you may find in other plans.