Assets for 529 college savings plans managed by Fidelity Investments grew nearly 60% for the past year ending Aug. 31 to $13.5 billion.
Boston-based Fidelity, one of the nations leading 529 plan managers, also reported that over 100,000 new 529 plan accounts were opened between September 2006 and August 2007, a record for the company.
Plan contributions reached more than $2.4 billion in that period, a 22% increase from the prior year period.
Last year’s Pension Protection Act, which made tax breaks for 529 plans permanent, was a catalyst for the growth, according to Joe Ciccariello, vice president of college planning for Fidelity Personal Investments.
“It appears the new tax changes have increased interest in 529 plans and encouraged families to start saving earlier and contributing regularly to their accounts,” he said.