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Schwab 529 Education Savings Plan

Discover how opening and funding a Schwab 529 Education Savings Plan can help you pay for qualified education costs while taking advantage of the potential tax benefits.

Open a 529 plan at Schwab

Charles Schwab & Co., Inc (Schwab) is here to support your education needs, no matter where you are on your journey.

What you get with a 529 education savings plan

A 529 education savings plan is a type of investment account that can help you save for qualified education expenses.

Tax advantages

Grow your money tax-free and make qualifying withdrawals without owing federal income tax. In some cases, you may also get state tax benefits.

Savings for education

Use the money on tuition-related expenses for kindergarten through high school, college tuition and fees, qualified apprenticeship programs or student loan repayments.

Flexibility

Open an account for anyone, including yourself. If plans change, you can choose another beneficiary. Plans are available in all states and there are no income restrictions.

Why get a Schwab 529 Education Savings Plan account?

Multiple investment options

Choose between a static portfolio that uses one strategy until you change it or an age-based option that adjusts itself as the beneficiary ages.

No account opening or service fees

Open an account with $0, and take advantage of having no annual maintenance fees or account minimums.

24/7 support

Call for help anytime, plus get access to support from more than 300 branches across the nation.

A portfolio that can change with you

Not only does Schwab let you choose between a variety of investment options, but you can also change your selections twice per calendar year as authorized by the IRS.

For example, if you know you have a child who’s graduating early, you may want to change to a portfolio designed for shorter-term investing, like a money market portfolio.

Learn about portfolio options at Schwab

How Schwab helps keep your investments secure

The Schwab 529 plan includes multiple investment options from numerous fund companies to help you diversify your portfolio.

This means your money is invested across multiple sectors and investment styles.

Most of these investment options are part of Schwab’s Mutual Fund OneSource® service and Schwab Affiliate Funds.

Open a 529 plan at Schwab

529 education plan FAQ

You have to be a U.S. citizen, resident alien or U.S. business entity to open and invest in the plan.

For designated beneficiaries, you’ll need each person's:

  • Social Security number.
  • Date of birth.
  • Address.

To set up automatic deposits, you’ll need your bank’s routing and account number.

It depends. If the account is owned by a parent, the U.S. Department of Education says that it counts as an asset when determining eligibility for financial aid.

There’s no impact if the account is owned by another relative like a grandparent, aunt or uncle.

We recommend you consult with a tax advisor for questions about how a qualified 529 plan could affect financial aid eligibility.

If you want to keep the tax benefits of the account, you can choose a new beneficiary as long as they’re an eligible family member of the current beneficiary. This could be a brother, sister, son or daughter.

You can also withdraw the funds, but there may be a 10% penalty on your earnings plus income tax. Exceptions apply, like disability, death, scholarships or rollovers to a Roth IRA.

Learn how to invest beyond education savings.

We want you to feel confident no matter what you’re investing for.

Learning the basic principles can help you make informed decisions for your future, whether you’re preparing for a long vacation or retirement.

Go to Investing Basics

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Take the first step in securing an education with a 529 plan from Schwab.

Open a 529 plan at Schwab

 

Note:

Important information from USAA Investment Services Company (ISCO):
Review our relationship with you in our Relationship Summary PDF.

Note:

Important Information from Schwab:

Before investing, carefully consider the plan's investment objectives, risks, charges, and expenses. This information and more about the plans can be found in the Schwab 529 Education Savings Plan Guide and Participation Agreement available from Charles Schwab & Co., Inc., and should be read carefully before investing.

Note:

You may request a Schwab 529 Education Savings Plan Guide and Participation Agreement by calling 888-903-3863 or going to schwab.com/529. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with state tax and other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available in such state's qualified tuition program. Tax and financial aid treatment of 529 plans is subject to change. As with any investment, it is possible to lose money by investing in this plan.

 

Learn more about USAA Investment Services Company Opens in a New Window or Charles Schwab Opens in a New Window, Inc. on FINRA's BrokerCheck website.

Related footnotes:

  1. Investment and Insurance Products are:

    • Not Insured by the FDIC or Any Federal Government Agency
    • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank
    • Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

  2. Investing involves risk, including potential loss of principal.

Related footnotes:

  1. This site is designed for U.S. residents. Non-U.S. residents are subject to country-specific restrictions.

  2. Diversification and automatic investment plans don't assure a profit or protect against loss in declining markets.

  3. Use of the term "member" or "membership" refers to membership in USAA Membership Services and does not convey any legal or ownership rights in USAA. Restrictions apply and are subject to change.

  4. USAA Investment Services Company (ISCO), a registered broker-dealer and a registered investment adviser, provides referral and marketing services on behalf of Charles Schwab & Co., Inc. (Schwab), a dually registered investment adviser and broker-dealer. Schwab compensates ISCO for these services.

  5. Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements. State tax treatment of withdrawals used for i) expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school, ii) expenses related to apprenticeship programs, or iii) student loan repayments is determined by the state(s) where the taxpayer files state income tax. Federal and state tax laws are subject to change, please consult with a tax advisor.

  6. Charles Schwab & Co., Inc. (member SIPC) receives remuneration from fund companies in the Mutual Fund OneSource® service for recordkeeping and shareholder services, and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.

  7. The Schwab 529 Education Savings Plan is available through Charles Schwab & Co., Inc., and is managed by American Century Investment Management, Inc. The Plan was created by the Kansas State Legislature under the provisions of Section 529 of the Internal Revenue code and is administered by Kansas State Treasurer. Notice: Accounts established under the Learning Quest Savings Plan/Schwab 529 Education Savings Plan and their earnings are neither insured nor guaranteed by the state of Kansas, the Kansas State Treasurer, American Century Investments or Charles Schwab & Co. Inc. Accounts established under Schwab 529 Education Savings Plan are domiciled at American Century Investments and not Schwab. American Century Investment Services, Inc., Distributor and Underwriter.

  8. American Century Investments receives remuneration from fund companies, including American Beacon Advisors, Metropolitan West Management, LLC and J.P. Morgan Mutual Funds for recordkeeping, shareholder services, and other administrative services ("Services") associated with funds held in the Schwab 529 Education Savings Plan portfolios. Schwab Funds and Baird Funds do not pay American Century Investments any remuneration for these Services.

  9. Schwab Asset Management® is the dba name for Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for Schwab Funds. Schwab Funds are distributed by Charles Schwab & Co., Inc. (Schwab), Member SIPC. Schwab Asset Management and Schwab are separate but affiliated companies and subsidiaries of the Charles Schwab Corporation.

  10. The projections or other information generated by Schwab Plan™ regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

    This information provided here is for general informational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

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