529 Plans

Utah Educational Savings Plan vs. Vanguard 529: What's the Difference?

March 9, 2021
Sootchy Team

Learn the differences in minimum contributions, investment options, and tax breaks between Utah’s my529 and Vanguard 529 College Savings Plan.

Utah Educational Savings Plan vs. Vanguard 529: What's the Difference?

Although 529 plans are administered by the individual states, anyone in any part of the country can sign up for virtually any 529 plan that interests them. Generally speaking, this wealth of opportunities allows for incredible flexibility when choosing a 529 plan, but it can also make it difficult to sift through the many options and come up with just the right account for you or your family. To help you decide on the Utah 529 plan that best fits your needs, we’ve compared two of the top plans in the country – Utah’s my529 plan (formerly called the Utah Educational Savings Plan) and Nevada’s Vanguard 529 College Savings Plan – and outlined their differences below. Keep reading to learn more.

How Utah’s my529 Education Savings Plan Works

As the former name of the my529 program implies, this Utah’s sole option is a version of the education savings plan, the most common type of 529 plan available today. These accounts offer tax-advantaged investment options to families looking to save for college.

Account owners – as well as their friends, relatives, and even employers – can make contributions to a plan that are then invested in one or more portfolios. The earnings from these investments accumulate untouched by federal as well as state income tax (in Utah and Nevada, at least). The trade-off is that the funds in one of Utah’s my529 plans can only be used for “qualified distributions,” which essentially means education-related expenses. These basic tenets apply to all education savings plans, including Utah’s plans, but the particular details vary from one state to the next.

How Nevada’s Vanguard 529 College Savings Plan Works

Because Nevada’s Vanguard 529 College Savings Plan is also an example of an education savings plan, the fundamental workings of these accounts are more or less the same as with Utah’s my529 program. In addition to the tax advantages and types of investments, both plans are examples of direct-sold 529 plans, meaning that prospective account owners can enroll with the program directly, rather than through a financial advisor.

The benefit of a direct-sold plan is that it tends to carry lower fees than an advisor-sold account, but it also comes with less support in the form of investment advice, and it may have fewer investment options to choose from as well.

The Difference Between Utah’s Savings Plan and Nevada’s Vanguard 529 Plan

Similarities aside, Utah’s my529 education savings plan is quite different from Nevada’s Vanguard Plan in a number of important ways. Below, we outline some of the biggest discrepancies between the two plans.

Minimum Contributions

Perhaps the biggest difference between Nevada’s Vanguard plan and Utah’s my529 plan is the minimum contribution required to start a plan. If you’re setting up a new my529 account, you can deposit whatever amount you’d like, both initially and in later months. On the other hand, if you’re a resident of a state other than Nevada and want to open a Vanguard plan, you’ll need a whopping $3,000 – the largest minimum contribution requirement of any 529 plan.

However, it should be noted that Nevada residents only need $1,000 to open a plan, and those contributing to an employer automatic investment plan need only deposit $50 at a time. No matter where you live, the minimum amount for subsequent contributions is $50 as well.

Investment Options

Another key difference between any two 529 plans is the number and type of investment options they offer. The my529 and Vanguard education savings plans both offer a selection of age-based portfolios – which transition from aggressive to conservative over time – and static portfolios that stay the same until the account owner makes a change.

Under Utah’s my529 program, account owners get their choice of four age-based options (separated by level of risk) and eight static options comprising seven predetermined portfolios and a customizable portfolio with 30 underlying funds. Meanwhile, Nevada’s Vanguard plan has a single portfolio based on the beneficiary’s projected date of enrollment, rather than their age, and 20 static portfolios.

Tax Breaks

A major benefit offered by many 529 plans is the option to deduct or claim a tax credit for contributions to a particular state’s plan. Such is the case with Utah’s my529 plan, which allows account owners to claim a 5% credit for contributions of up to $2,040 per beneficiary (or double that amount for married couples filing together). This limit increases regularly to adjust for inflation, but only account owners can claim the credit, even when the contributor is not the owner themselves. Utah corporations with one or more 529 plans can claim a deduction instead.

Nevada does not offer a tax deduction or credit, though, and the reason is simple: Nevada has no personal income tax from which to make a deduction. That said, there are a few states that offer a tax break to residents who contribute to any 529 plan, including Nevada’s Vanguard plan; if you live in Arizona, Arkansas, Missouri, Montana, Kansas, Pennsylvania, or Minnesota, you may be eligible for such a benefit.

Open a 529 Plan in Utah or Nevada with the Sootchy App Today

Whether you live in Nevada, Utah, or any other state, you’re free to choose from a variety of 529 plans, including the my529 education savings plans and Vanguard College Savings Plans offered by those two states. If you would like to open a new plan, manage an existing account, or contribute to a 529 plan owned by a friend or loved one, download the free Sootchy app today. We make it easy to save for college by enabling friends and family to come together to fund a child’s education. Learn more by visiting us online.


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