529 Plans: The Dakotas

You won't find any 529 plans in the woodchipper today as we turn our focus on the 529 college savings plans of North Dakota and South Dakota. All "Fargo" jokes aside, here are the things you might want to know about the Dakota's 529 plans. For sure and darn tootin'.

North Dakota

There's only one 529 plan in North Dakota: the College SAVE program managed by Upromise. There are no state residency requirements and no enrollment fee; any non-resident of North Dakota can expect to pay a $20 annual maintenance fee. To start the plan, participants can expect to contribute a minimum of $25 initially with the same amount set as a minimum contribution after that; there is a maximum of $269,000 per beneficiary.

The plan offers three age-based options to choose from. Static options include six asset allocation portfolios utilizing Vanguard stock, bond index fund and Prime Money Market Fund.

There are some benefits associated with this North Dakota plan. First, contributions up to $5,000 and $10,000 for singles and married couples, respectively, can net those filing taxes deductibles for up to those amounts. Next, this plan offers a matching incentive to the tune of $300 per beneficiary if the following crieteria are met: income is less than $40K for singles and $80K for couples, the beneficiary is less than twelve years old, and the contributions to be matched are made during the first year of contributing into the plan. If the income is less than $20K (single) and $40K(couples), the matching incentive can be had for an additional two years. Also, there is another incentive offered by North Dakota for those with children born in 2011; the state will make a $100 contribution to the plan with the understanding that parents will also make $100 in contributions before the child turns four.

South Dakota

South Dakota has two plans named CollegeAccess 529; one is adviser-sold while the other is direct-sold. Neither plan offers any program matches or any tax incentives.

The adviser-sold plan is open to any U.S. resident and accepts contributions for a beneficiary up to $350,000. Minimums for those utilizing the lump-sum option is $1,000 initially with $50 after that per investment option. There is also an automatic investment option that will have an initial contribution of $250 and $50 montly thereafter. There is no enrollment fee and no maintenance fees for South Dakota residents. Other citizens enrolling in the plan can expect a $5-per-quarter fee unless the account is over $20,000 or the automatic investment option is taken. Participants in the plan can choose from an age-based option or multiple static investment options; funds are managed by a variety of managers.

The other 529 plan is direct-sold only and is only available to South Dakota residents. It, too, has a $350,000 maximum per beneficiary while minimums are $250 per investment option for a lump-sum contribution and $50 per investment option for an automatic option. There are no fees associated with this plan. There is an age-based option plus a multi-fund portfolio and two individual-fund portfolios to choose from.

For those of you keeping track, we've covered Alaska, Hawaii, California, Oregon, Washington, Nevada, Arizona, New Mexico, Texas, Idaho, Utah and Montana so far in our quest to look at each state's 529 offerings. Stay tuned; there are more states to come.

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