The Delaware College Investment Plan

Delware Investment Plan
What is the Delaware Plan?
  • The Delaware College Investment Plan is a 529 Plan sponsored by the state of Delaware and managed by Fidelity Investments.
  • The money can be used for tuition, books, etc. at most accredited two- and four-year colleges and universities, eligible foreign institutions, and vocational-technical schools nationwide.
  • Residents of any state may invest in the Delaware College Investment Plan.1
Tax Advantages
  • Any earnings grow tax-deferred.
  • Distributions for qualified higher education expenses are federal income tax-free.2
Investment Options

The Delaware College Investment Plan offers a choice of portfolios tailored to a child's age, or the ability to customize portfolio selections based on an asset allocation strategy.

Who Can Invest and Benefit?

Any U.S. resident who is 18 years or older can open a Delaware College Investment Plan to save for a student's qualified higher education expenses.

  • There are no income restrictions.
  • The beneficiary can be changed to an eligible member of the original beneficiary's family3 at any time without a penalty.
  • The beneficiary doesn't need to be a child. Adults can use the plans to save for their own qualified higher education expenses.
  • Residents of any state can open a Delaware College Investment Plan account.1
Investing by Grandparents and Others
  • Grandparents or others who wish to contribute to a child's college savings may want to open a separate account.4:
  • The owner (Participant) of the account controls distribution of the assets.
  • The owner (Participant) can take advantage of possible gift and estate tax benefits (see below).
Gift and Estate Planning Benefits
  • Contribute up to $60,000 ($120,000 per married couple) per beneficiary in a single year without incurring a federal gift tax impact.5
  • Once assets are in the account, they are generally considered to be out of the Participant's estate.5
Professional Money Management
Control of Assets and Distributions
  • The account owner (Participant) maintains ownership of the assets until withdrawn.
  • Distributions from the Delaware College Investment Plan can be taken at any time for any reason; however, if the funds are not used for qualified higher education costs, any earnings will be subject to income tax at the Distributee's rate and a 10% federal penalty tax.6
  • If the beneficiary receives a scholarship, the scholarship amount can be withdrawn from the 529 Plan and the 10% federal penalty tax on any earnings will not apply6. However the earnings will be subject to income taxes at the Distributee's rate.
  • Withdrawing money from the Delaware College Investment Plan is easy, simply fill out the Distribution Form with instructions on where the money should be sent, and submit to Fidelity for immediate processing.
    -OR-
  • If the distribution is going directly to the Participant or Beneficiary (i.e. not the school) call a rep to process the distribution over the phone.
Minimums, Maximums and Fees
  • Minimum initial investment: $500
    -OR-
  • Investors who establish automatic investments can open an account with a minimum initial investment of $50, and a $50 per month or $150 per quarter. Use the College Investing Plan Automatic Contribution Services and Money Line® form to establish this feature.8
  • $20 annual maintenance fee per account (waived with automatic investments, direct deposit or if the combined value of accounts with the same beneficiary is $25,000 or more).
  • The combined balance of accounts for a beneficiary may not exceed $270,000 (the maximum contribution cap for the 2006 calendar year.)
Open an Account
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Learn More

  1. If you or the designated beneficiary are not a Delaware resident, you may want to consider, before investing, whether your or the beneficiary's home state offers its residents a plan with alternate state tax advantages or other benefits.
  2. Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), qualified distributions from a 529 College Savings Plan are federal income tax-free. The provisions of EGTRRA will expire on December 31, 2010. Unless the law is extended by Congress and the President, the federal tax treatment of 529 plans will revert to its status prior to January 1, 2002.
  3. The new beneficiary of 529 assets must have one of the following relationships to the original beneficiary: 1) a son or daughter; 2) stepson or stepdaughter; 3) brother, sister, stepbrother, or stepsister; 4) father or mother or an ancestor of either; 5) stepfather or stepmother; 6) first cousin 7) son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law and 8) son or daughter of a brother or sister. The spouse of a family member is also considered a family member. However, if the new beneficiary is a member of a younger generation than the previous beneficiary, a federal generation-skipping tax may apply. The tax will apply in the year in which the money is distributed from an account.
  4. The combined balance of accounts for a Beneficiary may not exceed the Plan's maximum contribution limit.
  5. In order for an accelerated transfer to a 529 Plan (for a given Beneficiary) of $60,000 (or $120,000 combined for spouses who gift split) to result in no Federal transfer tax and no use of any portion of the applicable Federal transfer tax exemption and/or credit amounts, no further annual exclusion gifts and/or generation-skipping transfers to the same beneficiary may be made over the five-year period, and the transfer must be reported as a series of five equal annual transfers on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. If the donor fails to survive the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes.
  6. Any earnings on nonqualified distributions will be subject to federal income taxes at the distributee's rate as well as a 10% federal penalty tax.
  7. Earn rate and points limit may be subject to change. Currently, cardholders are limited to 1,500 points per rolling twelve months based on the anniversary date from which the card was first used. Other restrictions apply. Full details are provided in the Program Guidelines documents. For rate, fee and other cost information, and to learn more about the benefits of the Fidelity Investments 529 College Rewards program, please refer to the online credit card application at www.fidelity.com or call 1-800-433-0480. This credit card program is issued and administered by MBNA America Bank, N.A., which is not an affiliate of Fidelity Investments, and does not offer, manage, or guarantee any of the 529 plans managed by Fidelity Investments.
  8. Periodic investing plans do not guarantee a profit or protect against a loss in a declining market.
  • Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. Fidelity does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. Fidelity makes no warranties with regard to the information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.
  • Brokerage services provided by Fidelity Brokerage Services, Member NYSE, SIPC
  • Units of the Portfolios are municipal securities and may be subject to market volatility and fluctuation.

Please carefully consider each Plan's investment objectives, risks, charges and expenses before investing. For this and other information on any 529 College Savings Plan managed by Fidelity, call or write to Fidelity for a free Fact Kit, or view online. Read it carefully before you invest or send money.

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