How to Open a 529 Plan: 3 Easy Steps

Planning for your child’s education savings can be daunting. A 529 plan is great for college and other eligible education expenses. It helps reduce taxes and offers flexible and versatile investment options.

But figuring out how to open a 529 plan can feel overwhelming if you’re new to it. We can help you get started with simple, step-by-step expert guidance.

Step 1: Complete the 529 plan application

To open a 529 plan, you’ll need basic personal information for both the account owner and beneficiary, including full names, Social Security numbers, dates of birth, and current addresses. The entire application process typically takes 10-15 minutes and can be completed online.

After choosing a suitable 529 plan (see how to choose a 529 plan), you’ll complete a simple application. Most families choose an individual account where a parent owns the account and names their child as the beneficiary. Custodial accounts, where the child is both owner and beneficiary, are less common.

Required information for enrollment:

• Account owner’s full legal name
• Beneficiary’s full legal name
• Social Security numbers for both owner and beneficiary
• Dates of birth
• Current mailing addresses
• Phone numbers and email addresses

You can enroll online through your chosen plan’s website or mail a printed application. Our Best 529 Plans page helps you compare plans and start your application.

Step 2: Choose your 529 plan investments

Most 529 plans offer three investment approaches: age-based portfolios that automatically adjust as your child ages, static portfolios that maintain consistent allocations, and individual fund options for customized investing. Age-based portfolios are the most popular choice for parents who prefer a hands-off approach.

Here’s how each investment type works:

• Age-Based Portfolios: Automatically adjust asset allocation as the beneficiary nears college age, starting with aggressive growth investments (more stocks) when the child is young and gradually shifting to conservative investments (more bonds and cash) as college approaches. This hands-off approach is ideal if you don’t want to manage investments actively.
• Static Portfolios: Maintain a fixed asset allocation (e.g., conservative, moderate, or aggressive) regardless of the beneficiary’s age. You control when to adjust your investment strategy and must manually rebalance as your goals change.
• Individual Fund Options: Allow you to build a custom portfolio by selecting specific mutual funds or ETFs based on your investment preferences. This option offers maximum control but requires more investment knowledge and active management.

If you’re unsure which option fits your situation, this investment selection guide walks you through the decision-making process based on your timeline, risk tolerance, and savings goals.

Step 3: Fund your 529 plan

You can fund your 529 plan through initial contributions, automatic monthly transfers, payroll deductions, gift contributions from family and friends, or rollovers from other education savings accounts. Most plans require a minimum initial contribution of just $25 to $50, making it easy to get started.

Here are the main ways to contribute:

• Initial Contributions: Many plans require minimal initial deposits of about $25, allowing you to increase contributions over time as your budget allows.
• Automatic Contributions: Schedule recurring monthly or quarterly transfers from your bank account to build savings consistently without thinking about it.
• Payroll Deductions: Some employers allow 529 contributions to be deducted directly from your paycheck, similar to retirement contributions.
• Gift Contributions: Friends and family can contribute through dedicated gifting platforms offered by most plans. The 2025 gift-tax exclusion limit is $19,000 per person ($38,000 per couple) before requiring a gift tax return.
• Rollovers and Transfers: You can transfer funds from another 529 plan, roll over money from a Coverdell ESA, or redeem qualified U.S. Savings Bonds directly into your 529.

Once your account is set up, review your investment strategy annually to ensure it aligns with your goals and timeline. The sooner you start, the more time your savings have to grow through compound interest and investment returns.

Key takeaways

• Opening a 529 plan is simple—you just need basic personal information and can complete the process online in 10-15 minutes.
• Age-based portfolios are the most popular investment choice because they automatically adjust from aggressive to conservative as your child approaches college age.
• You can start with as little as $25 and set up automatic monthly contributions to build savings consistently.
• Anyone can open a 529 plan for anyone else—you don’t need to be a parent or relative of the beneficiary.
• Friends and family can contribute to your 529 plan through gifting platforms, making birthdays and holidays opportunities to build education savings.
• It’s never too late to start a 529 plan—even if your child is already in high school, every dollar saved helps reduce future borrowing needs.

Frequently asked questions

Can anyone open a 529 plan?

Yes, anyone can open a 529 plan. You don’t have to be a parent or grandparent of the beneficiary. You can open a 529 plan for yourself if you plan to attend school in the future, or you can open one for a friend, niece, nephew, or any other person you wish to help.

Who can I name as a beneficiary on a 529 plan?

You can name anyone as the beneficiary of a 529 plan, even if they aren’t related to you. The beneficiary is the person who can use the funds for qualified education expenses. You can even name yourself as the beneficiary and use the funds for your own education. You can also change the beneficiary to another family member at any time.

When is it too late to start a 529 plan?

It’s never too late to start a 529 plan. Even if your child is already in high school or college, any amount saved helps reduce the need for student loans. You can also use 529 funds for K-12 private school tuition (up to $10,000 per year), graduate school, trade schools, and even student loan repayment (up to $10,000 lifetime).

How long does it take to open a 529 plan?

The application process typically takes 10-15 minutes if you have all the required information ready. Once submitted, most plans approve your application within 1-3 business days. You can usually start contributing immediately after approval, with funds invested according to your selected portfolio within a few days.

Do I need to choose my state’s 529 plan?

No, you can choose any state’s 529 plan regardless of where you live. However, many states offer tax deductions or credits for contributions to their in-state plan. Compare your state’s plan benefits with other highly-rated plans to determine which offers the best combination of tax benefits, low fees, and strong investment options.

Can grandparents open a 529 plan for grandchildren?

Absolutely. Grandparents can open and own a 529 plan for their grandchildren. This allows grandparents to maintain control over the funds while potentially receiving state tax benefits on contributions. Grandparent-owned 529 plans also don’t count as student assets on the FAFSA, which can help maximize financial aid eligibility.