Tuesday of this week, Fidelity Investments said that it is going to celebrate National College Savings Month by providing something different, something new to all of their clients that are looking for conservative college savings options. Actually, they made no mention of National College Savings Month, but I give them credit for coming up with a new college savings idea that coincides with this month!

As someone that talks with families on a regular basis, I have heard time and time again about how poorly their 529 college savings plans have been performing in the past couple of years. Since most of these funds are invested in stocks and bonds, they are subject to the same volatility that is experienced by the rest of us that have dabbled in the stock market over the years. Some days and months are good and others… not so much.

Since families have been experiencing more of the “not so much”, they are trying to find options that provide guaranteed returns and some sort of protection from the financial ups and downs of the investment market.  Fidelity Investments has heard the call of these families and is happy to oblige.

They are rolling out a 529 savings plan that is an interest bearing bank deposit savings account with FDIC protection. You basically get the best of both worlds. You get the tax advantages of having a 529 college savings plan AND you get the safety net of having your funds be FDIC insured.

The interest rate of return is indexed to the federal funds rate (which is hovering around zero) but one can only hope that is has no where to go but up… if they are investing in Fidelity’s new 529 option.

If you would like to learn more about the college savings options provided by Fidelity, you can check out their website here for more information.

Today marks the last day of National College Savings Month, but I certainly hope you know that you don’t have to wait for September of each year to start a college savings fund. If you are busy today and have to open a college savings account tomorrow, trust me… no one will harass you because it is October and not September!

Now Is Always The Time To Save For College and families just recently got an incentive to contribute to education savings through New York’s 529 College Savings Plan. Thomas DiNapoli is the state’s comptroller and he states that fees are going to be reduced by 50%. The old fee structure to manage the 529 fund was set at .49% but starting this month the fee will now be set at .25%.

“Family budgets are getting tighter, but families still need to save for college,” DiNapoli said in a statement. “When you’re saving for college, every dime counts.”

Based upon this change in fees, it is estimated that plan participants will have a combined savings of almost $20 million dollars annually. 529 program fees can range from .20 percent to upwards of 2.27 percent. At .25%, the New York 529 Savings Plan can now boast a reputation of being one of the lowest fee based college savings plan in the nation.  New York’s 529 College Savings Plan is the largest of it’s type in the nation with over $8 Billion dollars invested in about 500,000 separate fund accounts.

New York’s 529 college savings plan is open to any U.S. Citizen (or resident alien) that has a valid social security number. The funds can be used at any accredited college, university, or vocational school in the country (it is not just limited to schools in the state of New York). The minimum contribution required to open an account is only $25.

If you have been thinking about starting a college savings account, you should probably take a look at the option provided by the state of New York. You can view additional information about their 529 program here on the web or you can drop them a call at 877-697-2837 or email: NY529@nysaves.org