Ultimately, savers should look at other plans and consider other advisers as well. Parents shouldn't pick a plan solely because it's sold by their bank, he says.
4. Are there any special features offered by the bank? One advantage to choosing a 529 plan from or affiliated with your bank is that the bank can more easily track a lost electronic payment.
If a parent sets up an automatic transfer from a checking or savings account of a set amount each month to be deposited into a 529 plan, it may be easier and quicker for a bank to track down a payment when it's involved with the 529 plan, Seltzer says.
[Take these steps before opening a 529 plan.]
Whether or not parents choose a 529 plan offered by the bank, they could still end up with this benefit if their plan includes savings accounts or certificates of deposit from their bank. Maine's direct-sold plan, for instance, is managed by Merrill Lynch, but offers Bank of America savings accounts as one of its investment options.
First National Bank of Omaha offers a direct-sold plan as well adviser-sold plans. Deborah Goodkin, managing director and program manager for Nebraska College Savings Plans at the bank, says the main advantage of investing in a 529 plan at a customer's own bank is that it knows its customers on a personal basis and can help them make the investment choices. There are representatives for Nebraska's 529 plans at more than 90 percent of First National's locations.
"Picking where you'll buy your plan is as much about customer service as it is about a specific bank or brokerage," says Goodkin. "Know what you're getting and who you are getting it from."
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Corrected 6/26/13: A previous version of this article misstated Mike Fitzgerald’s position.