Which 529 Plan Should New York Residents Use?

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Kathryn Flynn

By Kathryn Flynn

November 9, 2019

New Yorkers can choose to invest in almost any 529 plan, but they are eligible for a state income tax deduction if they use an in-state 529 plan. The state of New York administers two 529 college savings plans, New York’s 529 College Savings Program – Direct Plan, and New York’s Advisor-Guided College Savings Plan

The main difference between the two New York plans is that one plan is a direct-sold 529 plan and the other is an advisor-sold 529 plan. Direct-sold 529 plans can be opened online and generally have lower fees, while advisor-sold 529 plans are available through licensed financial advisors who can offer professional guidance on college savings. New York’s direct-sold option offers lower fees and stronger historical performance than New York’s advisor-sold 529 plan. 

How to enroll in a New York 529 plan

Families can open New York’s 529 College Savings Program – Direct Plan by clicking the ENROLL now button and completing an application online. The 529 plan account owner will be required to provide their name, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), date of birth, mailing address, telephone number and email address. 


A licensed financial advisor can help families enroll in New York’s Advisor-Guided College Savings Program.

New York 529 plan state income tax deduction

New York offers residents an annual state income tax deduction for contributions of up to $5,000 ($10,000 if married filing jointly) to a New York 529 plan. The state income tax deduction is only available to the account owner or their spouse. If a grandparent or other individual makes a gift contribution to a parent-owned 529 plan account, they are not eligible for the deduction.

New York 529 plan fees

New York’s direct-sold 529 plan has a total asset-based expense ratio of 0.13%, which is one of the lowest available among 529 plans. The total asset-based expense ratio for the advisor-sold plan ranges from 0.33% to 2.04%, depending on the share class. 

According to Savingforcollege.com’s most recent 529 fee study, the 10-year total asset-based fees on a $10,000 investment in New York’s direct-sold 529 plan would be $166. The 529 fee study does not include advisor-sold 529 plans.

New York 529 plan investment options

New York’s direct-sold 529 plan offers diverse investment options featuring Vanguard mutual funds. Portfolio options include:

  • Age-based portfolios based on a desired level of risk (conservative, moderate, aggressive) that automatically shift to more conservative investments as the beneficiary gets closer to college
  • Multi-fund portfolios with a target risk and investment objective (aggressive growth, growth, moderate growth, conservative growth and income)
  • Individual fund portfolios that invest in a single mutual fund
  • An interest accumulation portfolio that is designed to protect the principal investment

Families who invest in New York’s advisor-sold 529 plan can select among investment options featuring mutual funds from JP Morgan and State Street Global Advisors (SSGA). Portfolio option include:

  • Age based portfolios that adjust allocations based on the beneficiary’s age
  • Multi-fund portfolios with a target risk and investment objectives
  • Individual fund portfolios from JP Morgan Chase and SSGA

New York 529 plan performance

New York’s direct-sold 529 plan ranks 4th, 8th, 2nd and 5th for the 1-,3-, 5- and 10-year periods ended June 30, 2019, respectively, according to Savingforcollege.com’s direct-sold 529 plan quarterly performance rankings.

New York’s advisor-sold plan ranks 13th, 17th and 15th among advisor-sold 529 plans for the 1-,3-, and 5-year periods ended June 30, 2019, respectively.

Savingforcollege.com assigns a 5-Cap Rating to each 529 plan, based on performance, costs, features, reliability and whether or not the plan offers any special benefits for residents.

New York’s direct- and advisor-sold 529 plans received the following ratings for residents as of June 30, 2019:

529 Plan





Resident Upgrade

Overall 5-Cap Rating

New York’s College Savings Program – Direct Plan







New York’s Advisor-Guided College Savings Plan







Source: Savingforcollege.com data as of 6/30/2019



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