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NC 529 Plan

The NC 529 Plan1 is a tax-advantaged2 education savings plan designed to enable participants to invest funds for the purpose of paying qualified education expenses of their designated beneficiaries on a flexible basis.

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Flexible education savings

You do not have to be an SECU member to open a NC 529 Plan. The account owner (participant) must be 18 years old and have a Social Security Number (SSN) or other taxpayer identification number (TIN). You may open and invest funds on behalf of yourself, your child, your grandchild, or any other future student, regardless of age. The participant may change the beneficiary later, if needed, subject to the Plan rules.

  • $25 minimum contribution

    The minimum contribution is $25 for both the initial deposit and any subsequent contributions.

  • Contribute via ACH or Payroll Deduction

    You can make contributions as often as you like, including at regular intervals using automatic draft (ACH) or Payroll Deduction.

  • Invest your contributions

    The NC 529 Plan offers several investment options, including the Federally-Insured Deposit Account investment option (through SECU), which provides income plus protection of principal and earnings through federal share insurance by the National Credit Union Administration (NCUA) up to the applicable federal share insurance limits.3

  • Fund qualified education expenses tax-free

    The earnings on NC 529 Account funds withdrawn for payment of qualified education expenses are not subject to federal or North Carolina state or local taxes.

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Open an NC 529 Plan

Accounts in the NC 529 Plan are not SECU deposit accounts. The NC 529 Plan is available and administered by College Foundation, Inc (CFNC). You can open your NC 529 Account online through CFNC, or at your local branch. If you need assistance selecting an investment option, ask to schedule an appointment with a CUIS investment representative.4

To open an NC 529 at your local branch, bring identifying information: name, address, Social Security Number (SSN), date of birth for both the participant and beneficiary. If you do not yet know the SSN of the beneficiary, you may open an account without it, but you must provide it later.

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Qualified education expenses

  • College expenses, including tuition, books, fees, room and board, a computer and more
  • Trade school expenses, as long as they are on the Federal Student Aid school list
  • Apprenticeship program expenses for programs registered with the U.S. Department of Labor or State Apprenticeship Agency
  • K-12 tuition expenses up to $10,000 per year, per child
  • Adaptive equipment for child(ren) with special needs
  • Student loan payments on behalf of the beneficiary, or beneficiary’s siblings up to $10,000 per individual

Funds from your NC 529 Account can be used at North Carolina schools, out-of-state schools, and some international schools, as long as they are considered an eligible institution by the Department of Education.

The availability of tax benefits may be contingent on meeting other requirements.

The features of a qualified tuition program such as the NC 529 Plan are complex and have tax implications. For complete information, and before you enroll, carefully review the complete program description at CFNC or request one by calling the NC 529 Plan toll-free at (800) 600-3453, or emailing savings@cfnc.org.

This description is not intended as individualized tax advice to any actual or potential participant, contributor, beneficiary or other interested person. The application of tax rules may vary based upon a person’s particular facts and circumstances. Consult with your own attorney or tax advisor regarding the tax consequences of participation in the NC 529 Plan.

Frequently asked questions about NC 529 Plan

No, you can request a withdrawal at any time. However, if the withdrawn funds are not used for qualified education expenses, tax and penalty may apply to any withdrawn interest.

The current maximum balance allowable is $540,000 for all NC 529 Accounts with the same beneficiary. This limit is reviewed, and may be adjusted, annually. Accounts that have reached this amount cannot receive further contributions but can continue to accrue earnings in accordance with the terms of the applicable investment option(s).

Both CESAs and NC 529 Plans can be used to help pay for education costs; however, there are key differences between the contribution amounts and account restrictions. NC 529 also allows you to choose from a variety of investment options, whereas an SECU CESA is a deposit account that pays a dividend rate.

 

NC 529 Plans have no income level restrictions, can be opened for a beneficiary over 18 years old, and have a higher annual contribution limit than CESAs. Additionally, NC 529 Plans limits elementary and secondary education expenses to tuition only, whereas CESA funds can pay for elementary and secondary education expenses including but not limited to tuition, room and board, equipment, special needs services, and more.

 

The information above is provided for informational purposes only. Consult your tax advisor for additional information regarding the requirements and limitations on CESAs and NC 529 Plans.

 

Have more questions? Visit CFNC’s FAQ page.

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  1. The NC 529 Plan is officially known as the North Carolina College Savings and Investment Program and is referred to as North Carolina's National College Savings Program. It is generally marketed under the shorter name, “NC 529 Plan.”
  2. All descriptions of tax treatment of the NC 529 Plan are based on current federal and North Carolina state tax law. However, state tax law varies from state to state. Please consult your own attorney or tax advisor regarding the tax consequences specific to your participation in the NC 529 Plan.
  3. When determining the amount of share insurance coverage available to a Participant, the Participant’s 529 Plan Account funds invested in the Federally-Insured Deposit Account investment option are aggregated with all other accounts (if any) held by the Participant at SECU with the same ownership rights and legal capacity.
  4. Investment advisory services offered through Credit Union Investment Services. Securities offered through SECU Brokerage Services. Member FINRA, SIPC. Securities products are not credit union deposits. They are not obligations of or guaranteed by a credit union or its affiliates. They are not insured by the NCUA or any federal government agency. Securities products involve investment risks, including possible loss of principal. CUIS investment representatives are also credit union employees, who may accept deposits.