Update 9/2/23: Deal is back for 2023
Update 9/8/22: Deal is back for 2022 (see this comment for eligible states)
The Offer
- ScholarShare is offering a bonus of $100 when you open a new 529 Plan account with $1,000+
The Fine Print
- The ScholarShare 529 College Savings Plan (“ScholarShare 529”) is a 529 college savings plan administered by the ScholarShare Investment Board (“SIB”), an instrumentality of the state of California, and managed by TIAA-CREF Tuition Financing, Inc. (“TFI”).
- To receive a $100 matching deposit (“the Matching Deposit”), eligible individuals must open a new ScholarShare 529 account (for a new beneficiary) online at www.ScholarShare529.com between September 1, 2019 at 12:01 AM Pacific Time (PT) and September 30, 2019 at 11:59 PM PT with an initial deposit of at least $1,000 to be contributed and invested at the time the new ScholarShare 529 account is opened.
- The initial $1,000 deposit must be received within 10 business days after the account is established.
- The Matching Deposit will be made to the eligible ScholarShare 529 account on or before 11:59 PM PT on January 15, 2020. Limit: one (1) Matching Deposit per new ScholarShare 529 account per unique accountholder/beneficiary combination.
- Offer open to legal residents of the 50 states of the United States who are at least 18 years of age or older as of September 1, 2019 and have a social security number or federal taxpayer
identification number and excludes the following: (a) members, officers, and employees of SIB; TFI and its parent, subsidiaries, affiliates, owners, members, directors, managers, officers, employees, trustees, agents; and their respective immediate family members (spouse, domestic partner, parents, legal guardians, grandparents, grandchildren, siblings, children and “step” of each) and those individuals living in their same household; and (b) FINRA affiliated customers. - All taxes and other costs associated with this promotion are solely the responsibility of the recipient and/or beneficiary. Beneficiary for the new ScholarShare 529 account cannot be a beneficiary of an existing ScholarShare 529 account for that account owner.
Our Verdict
We’ve seen a similar deal before, but that was for $50. Upside was that only required a $50 deposit. This is a bigger bonus but requires a much larger deposit. Chuck & I aren’t the people to ask when it comes to these college plans, so make sure you do your own research first.
Going to try to open 3 accounts for me (Self/Me, Child, P2), and 3 accounts for P2 (P2, Child, P1/Me), and then roll all of them to my local state 529 once bonus posts, hopefully within 2023 to get contribution deduction on state taxes
Did anyone get any form of bonus confirmation? By email?
You don’t get any email confirming the bonus and no mention of the bonus during account opening.
I just opened one for my kid 1. Can someone more knowledgeable tell me if I need to create a new login for my kid 2 or just open a new account within the same login? TIA!
same question!
Best play:
1) 9/X/23 Open w/ $1000
2) After deposit hits, Withdraw $999
3) 1/1/24 Received $100 bonus
4) 1/24/23 a) Withdraw $101 taxable or b) let $101 invest
Could even reuse the $1000 several times during the month for multiple account openings for different Parent/Kid combos
Just opened for C1, seeing if it works using rollover I set up for myself last year
Wouldn’t withdrawing the $999 cause a taxable event/penalty each time?
5/29 day deal is better, total of $600 invested for $100 bonus
Is this offer once per lifetime for each account owner and beneficiary combination?
The terms say: “Beneficiary for the new ScholarShare 529 account cannot be a beneficiary of an existing ScholarShare 529 account for that account owner.”
Yes, it is effectively once per lifetime because if you close the account, you can’t open a new one for the same beneficiary online, you can only reopen the old account, and you have to call for that.
“Must be contributed and invested.”
I’m a little confused. If I do this bonus and then withdraw $1,100 for non-eligible 529 expenses and close the account am I going to be hit with taxes, fees & penalties totally negating the bonus?
Only on the portion above your contribution basis.
Only the $100 would be subject to tax and penalty. Just FYI up to 10k can be used to repay student loans is my understanding
Looks like the balance does not need to remain at $1k. T&C shows “balance greater than zero”.
Might be able to withdraw majority before the bonus posts 1/31/24.
How long do you have to leave the $1000 in?
It’s a 529 account… You can’t take money out unless for education of the beneficiary.
You can but any earnings are subject to tax/penalty. You can take your basis out without tax/penalty.
There will also be an option to move it to a Roth IRA for the recipient up to 35k lifetime limit starting in 2024. Lots of rules and limitations but it’s another option: https://www.fidelity.com/learning-center/personal-finance/529-rollover-to-roth
It’s a neat option but not terribly practical if someone’s only intent is to game the system because the account need to exist for 15 years before you can do this.
But you can’t take your basis out separately from earnings.
Sure you can, it’s first-in, first-out accounting.
I wish it was, but no, 529 plans are not first-in, first-out.
I assume when you transfer 1k out, they will not look at it as “the 1k he put in”, it will be 909 that he put in plus another 91 that he earned, rendering your bonus as gone
It would be $1000 basis and $100 earnings.
If you take out $1000 it is prorated, so approx $909 basis and $91 earnings like you said.
But Then you would still have $100 left in the account which would be $91 basis and $9 earnings.