Best 529 Plans in New York: Compare College Savings Plans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It may not have not been reviewed, commissioned or otherwise endorsed by any of our network partners or the Investment company.

Written By

Reviewed By

Updated on Friday, July 16, 2021

New York offers two 529 programs: a direct-sold program and an advisor-sold program. Anyone can sign up for a direct-sold program online and manage it themselves, while the advisor-sold programs are sold through and managed by a financial professional.

Both New York 529 plans offer a simple way for families to invest money for educational expenses with federal and state tax benefits. A total of $520,000 per beneficiary can be invested in either or both of the programs.

New York’s 529 College Savings Program Direct Plan

Plan name

New York’s 529 College Savings Program Direct Plan
Program typeDirect-sold
Fees and expensesEnrollment fees: $0
Maintenance fee: $1.30/year for every $1,000 invested
Phone Number877-697-2837
Websitewww.nysaves.org

New York’s 529 College Savings Program Direct Plan offers a way to save and grow money for a student’s post-high school education, with some significant federal and state tax benefits. Once a 529 plan is established, any U.S. citizen or noncitizen resident can contribute to it, which makes it easy for grandparents and other relatives to do so if they choose. There’s no minimum balance required, but there is a maximum total limit of $520,000 per student for all New York state 529 plans combined.

Setting up an account can be done simply online, and there’s no enrollment fee. After you provide some basic information, including the birthdate and Social Security number of both the person setting up the account and the beneficiary, you choose how you want to invest the money within the account. For each account, you can select five investments including stocks, bonds and short-term reserves based on your tolerance for risk. You can choose to have your portfolio managed by a professional or manage it yourself.

Finally, you’ll select how you want to contribute (electronically, by mailing in checks, etc.) and receive updates about the account. Money in the account then grows tax-free, and, as long as the funds are used for qualifying expenses, withdrawals aren’t taxed either.

New York’s 529 Advisor-Guided College Savings Program

Plan name

New York’s 529 Advisor-Guided College Savings Program
Program typeAdvisor-sold
Fees and expensesEnrollment fees: $0
Maintenance fees: $25 annually (waived for account balances of $25,000 or more); 0.30% annualized program management fee
Phone Number800-774-2108
Websitewww.ny529advisor.com/

New York’s 529 Advisor-Guided College Savings Program also offers a way to grow and save money for post-high school educational purposes with significant state and federal tax savings. The plans are sold by financial advisors who then manage the portfolios. A minimum initial investment of $1,000 is required; each beneficiary can receive up to $520,000 total in either or both of the New York-state 529 plans.

You can choose from age-based, asset allocation and individual portfolios, where funds will grow tax-free. A financial professional will help you choose which one is right for you and manage it over the years. Withdrawals are tax-free as long as the funds are used for approved educational expenses.

To open a New York 529 Advisor-Guided College Savings Program, contact a financial advisor or call 800-774-2108. Or, check out our list of New York’s top financial advisors.

New York’s 529 College Savings Program Direct Plan vs. New York’s 529 Advisor-Guided College Savings Program

 Best for...Drawbacks
New York’s 529 College Savings Program Direct Plan
  • Those who want to save for a child’s education and live in New York
  • Those who want to take a hands-on approach to setting up a 529 plan
  • People in other states may not benefit from the same tax credit offered in New York
  • There are fewer investment options
New York’s 529 Advisor-Guided College Savings Program
  • Those who want to save for a child’s education who live in New York
  • Those who want a bit more guidance and assistance from a financial advisor when setting up and/or managing the plan
  • Those who want more investment options
  • People in other states may not benefit from the same tax credit offered in New York
  • There’s a $1,000 minimum investment
  • Fees are higher than they are for the direct-sold program

New York’s two 529 plans are quite similar, offering the same state and federal tax benefits. Each beneficiary can receive a total of up to $520,000 in contributions to either one or both of the accounts combined.

One primary difference between the two is in cost, as the advisor-sold plans come with higher fees. For example, the minimum initial contribution for the advisor-sold program is $1,000, while the direct-sold plan has no minimum. The maintenance fee for the direct-sold program is just 0.13% (or $1.30 for every $1,000 invested), whereas with the advisor-sold program, there’s an annual $25 maintenance for accounts with balances less than $25,000, plus a 0.30% annualized fee in addition to other portfolios fees and expenses.

The advisor-sold program, however, offers a more hands-on approach, as a financial professional provides guidance in setting up and managing the account. New York’s advisor-sold program also offers more investment options. While both New York 529 plans offer the same types of options — age-based, blended, capital preservation, equity, fixed income — the advisor-sold program offers 22 options, while the direct-sold program only offers 17.

What tax benefits are offered under New York 529 plans?

Maximum annual state deduction (New York state 529 accounts)Singles: $5,000
Joint filers: $10,000
Maximum annual state deduction (non-New York state 529 accounts)Singles: Varies
Joint filers: Varies
RequirementsWork and pay state income taxes in New York

If you work and pay income taxes in New York, your contributions to the state’s 529 plans may come with tax benefits. Single filers can claim a deduction of up to $5,000, while married couples can claim up to $10,000 per year on their state taxes.

These same benefits apply no matter which state the student attends school in, as long as it’s an eligible school. Eligible schools include trade and vocational schools, two- and four-year colleges and postgraduate programs in the U.S. and abroad. However, New York state tax benefits don’t apply if the funds are used for K-12 education.

What if I want to pay for an out-of-state school?

Funds in one of New York’s 529 plans can be used to pay for allowed school expenses at any eligible post-high school institution in the U.S. or abroad, including trade and vocational schools. The same state and federal tax benefits apply whether a student attends a school in New York or anywhere else.

While those living in other states are welcome to purchase either of New York’s 529 plans, they may not get the same state tax deduction from their state of residence.

Can I rollover my New York 529 account to another state’s 529 plan?

Yes, you can rollover one 529 account per beneficiary each year without a tax penalty. If you do so more frequently, you’ll have to pay federal income tax and a 10% penalty. In some states, you may also be responsible for paying tax on those contributions to the New York 529 plan for which you’ve already received a deduction.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.