Charles Schwab & Co. Inc. said that it has cut fees and reduced the initial investment required for its 529 college savings plan.
The Schwab 529 College Savings Plan, which is sponsored by the state of Kansas, has reduced program management fees to 0.20% from 0.39% of account assets, the San Francisco company announced Tuesday. This brings the total fees associated with the plan to between 0.78% and 1.33%, depending on the portfolio selected.
The initial investment minimum was reduced to $1,000, from $2,500. The initial minimum is waived for accounts whose holders sign up for automatic monthly deposits of at least $50.
Assets under management in Schwab's 529 Plan have been growing at a higher rate than the industry average, according to Financial Research Corp. in Boston. At March 31, assets in the Schwab program had grown 66% from a year earlier, to $1.1 billion.
Charles Schwab Corp. has spent the past two months reducing its minimums. Also this month it cut the minimum initial investment for its mutual funds to $100. Previously minimums ranged from $1,000 to $2,500, depending on the portfolio and account type.
In April Schwab introduced a $1,000 minimum to open any type of account at Schwab, and a custodial account minimum of $100. The $1,000 account minimum is waived entirely for people who deposit $100 or more a month through direct deposit or Schwab MoneyLink.
