9 stealthy 529 plan fees to avoid

Insufficient funds fee: If you send a check or initiate an electronic bank transfer and your bank account doesn't have sufficient funds to execute the transaction, most plans will charge a fee. Virginia's 529 plan charges a $25 insufficient funds fee.

Rejected electronic bank transfer: A variation on the returned-check fee, the rejected electronic bank transfer fee is a fee that a 529 plan charges if your transfer won't go through. Usually that reason is insufficient funds. Then your bank might charge you a second fee as well.

Application fees: Most plans don't have application fees, but some do. The Florida prepaid plan has a $50 application fee. The fee is reduced to $30 if you also open a Florida Prepaid College Investment Plan at the same time. Maryland's prepaid plan carries a $75 fee for a paper application, $50 for an online application. The latter is reduced to $20 when you enroll in the Maryland College Investment 529 Plan at the same time or purchase more than one year of tuition from the prepaid plan.

Cancellation fees: Some prepaid plans have cancellation fees to cancel the plan and get your money refunded within a certain period. For the Florida prepaid plan, that fee is $50 if your plan has been in operation for less than two years. The Virginia 529 plan charges a $25 cancellation fee that is waived if the beneficiary dies, becomes disabled or receives a scholarship. The Illinois Prepaid plan charges $100 or 50 percent of the amount paid, whichever is less.

Change of beneficiary or account owner fee: If you change the account beneficiary to a sibling, parent or other relative of the initial beneficiary or change the account owner, you may have to pay a fee. The Virginia 529 plan charges a $10 fee for both. The Illinois Prepaid 529 plan charges a $15 fee for changing the beneficiary or the account owner.

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