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Building Block 2: Open and Connect Your Own College and Career Savings Account

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Once you activate and view your child’s NYC Scholarship Account, it is time to take the next step. Open and connect your own college and career savings account and NYC Kids RISE will put another $25 reward toward your child’s NYC Scholarship Account!

Why should I open a separate account?

NYC Kids RISE owns and manages your child’s NYC Scholarship Account (including contributions made through Community Scholarships).This means that only NYC Kids RISE can put money into that account. To start saving your own money for your child’s future and receive additional rewards from NYC Kids RISE, open a separate college and career savings account for the benefit of your child.

COLLEGE AND CAREER SAVINGS ACCOUNT OPTIONS

The Save for College Program allows you to connect one of two types of college and career savings accounts to your child’s NYC Scholarship Account. When you complete this step, you will receive the $25 reward for completing Building Block 2 in your child’s NYC Scholarship Account.

NY 529 DIRECT PLAN ACCOUNT

A type of investment account specifically created to help families save for college and career training. This account has tax advantages. More information below and at nysaves.org.

Amalgamated Save for College Bank Account

A traditional savings account at Amalgamated Bank allows families to save at an insured financial institution.

Read below for more information on college and career savings accounts available through the Save for College Program, or visit our downloadable resources page. Every family’s financial circumstances are different, and you should consider your own circumstances before saving or investing. You may wish to explore other alternatives, such as 529 plans offered by other states and savings accounts offered by other banks, to see if they might be a better fit for you and your family.

Frequently Asked Questions

1. What is it?

529 Account: A 529 account is a type of investment account created to help families save for college and career training. Money in a 529 account can grow over time, but it can also lose value. Money in this account grows tax-free, and earnings are tax-free upon withdrawal if used for qualified higher education expenses at eligible institutions.

Amalgamated Save For College Bank Account: This is a traditional savings account at Amalgamated Bank, with a child named as the beneficiary. Deposits in this savings account are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.

2. How can I open this account and connect to my child’s NYC Scholarship Account?

529 Account: Log back into Savings Tracker and click the create/connect button to start your NY 529 Direct Plan application.

Amalgamated Save For College Bank Account: Visit an Amalgamated Bank branch located in NYC and ask to open an Amalgamated Save for College Bank Account. Find your closest branch at amalgamatedbank.com/find-branch-or-atm. For more information, contact Amalgamated Bank: 800-662-0860.

3. How could the savings change over time?

529 Account: Money in this account can grow over time, but can also lose value based on the investments selected.

Amalgamated Save For College Bank Account: Money in this account will earn interest.

4. Does this account come with tax benefits?

529 Account: This account comes with tax benefits, including tax-free earnings and potential state income tax deductions.

  • Money in the account grows state and federal tax-deferred, meaning earnings do not count toward your taxable income.
  • New York State taxpayers may deduct up to $5,000 per year ($10,000 for married couples filing jointly) for contributions to this account when calculating state taxable income.
  • State tax deductions may be subject to recapture in certain circumstances such as rollovers to another state’s 529 plan or nonqualified withdrawals.
  • Withdrawals are federal and NY State tax-free, as long as they are used for qualified higher education expenses.

Amalgamated Save For College Bank Account: This account does not come with tax benefits.

5. What do I need to open an account?

529 Account: To enroll in this account, you will need:

  1. A valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for the account owner and the beneficiary;
  2. Date of birth of the account owner and beneficiary;
  3. An email address to enroll online for the account owner;
  4. A verified U.S. address.

Amalgamated Save For College Bank Account: To enroll in this account, you will need:

  1. A valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the account owner and the beneficiary;
  2. A valid photo ID of the account owner;
  3. Address and date of birth of the account owner;
  4. Child’s name and date of birth; and
  5. An email address for the account owner (recommended).
6. What can the savings be used for?

529 Account: Money in this account is specifically marked for college and career education expenses (including textbooks, laptops, tuition, etc.). Withdrawals from this account may incur tax penalties if the money is not used for higher education expenses.

Amalgamated Save For College Bank Account: There are no legal restrictions to uses in this account. There are no withdrawal penalties with this account. However, the intent of this kind of account is for a child’s college and career education and not for other purposes.

7. How much money do I have to deposit into the account and is there a minimum balance?

529 Account: No minimum amount to deposit is required for this account. However, NY 529 may close your account if there are no deposits after six months. If they close your account, NY 529 will send you information by mail with instructions on how to reopen the account. Once they close the account, you will have another six months to make a deposit (which can be as low as $1) by mailing a check or money order, or by calling NY 529 at 877-697-2837. If you do not make a deposit in that time period, you will have to fill out a new enrollment form to reopen your account.

Amalgamated Save For College Bank Account: No minimum balance or minimum amount to deposit is required for this account. However, your account may be closed after nine months if you do not deposit any funds into it, so we encourage you to make a deposit of at least $5 shortly after opening.

8. How often do I have to deposit in the account?

529 Account: You can deposit whatever amount you want and keep any amount you want in this account (up to the maximum account balance allowed by the NY 529 Direct Plan).

Amalgamated Save For College Bank Account: You can deposit whatever amount you want and keep any amount you want in this account. You need to make at least one deposit within the first 9 months.

9. Could my eligibility for public benefits be affected by saving money in this account?

529 Account: Possibly. Visit nyckidsrise.org/downloadable-resources to find more information on public benefits impacts. For more support, call NYC Kids RISE at 833-KID-RISE (833-543-7473).

Amalgamated Save For College Bank Account: Possibly. Visit nyckidsrise.org/downloadable-resources to find more information on public benefits impacts. For more support, call NYC Kids RISE at 833-KID-RISE (833-543-7473).

10. Could saving in this account affect my child’s eligibility for federal and state financial aid (according to current financial aid rules)?

529 Account: Possibly. If your household income is less than $50,000, savings in this account will usually not affect your child’s eligibility for federal financial aid. If your household income is greater than $50,000, only a small part of the savings in this account will be counted for federal financial aid eligibility. These answers may change in future years. For more detailed information, read the “Impact on Future Financial Aid” guide on our website: nyckidsrise.org/downloadable-resources/#additional-materials.

Amalgamated Save For College Bank Account: Possibly. If your household income is less than $50,000, savings in this account will usually not affect your child’s eligibility for federal financial aid. If your household income is greater than $50,000, only a small part of the savings in this account will be counted for federal financial aid eligibility. These answers may change in future years. For more detailed information, read the “Impact on Future Financial Aid” guide on our website: nyckidsrise.org/downloadable-resources/#additional-materials.

Additional tools and resources

  • Contact NY 529: For detailed information about NY 529 Direct Plan accounts, visit nysaves.org or call 877-NYSAVES (877-697-2837).

  • Contact Amalgamated Bank: For detailed information about Amalgamated Save for College Bank Accounts, visit an Amalgamated branch near you or call 800-662-0860. To find an Amalgamated branch,
    visit amalgamatedbank.com/find-branchatm.

  • Watch this short how-to video on opening a NY 529 Direct Plan account in English, اردو (Urdu), বাংলা (Bengali), 中文 (Chinese), Français (French), Kreyòl Ayisyen (Haitian Creole), 한국어 (Korean), Русский (Russian), Español (Spanish) or العربية (Arabic).

  • Attend a Save for College Program event. Click here for a schedule of upcoming events.

  • Schedule a free appointment with a financial counselor at an NYC Financial Empowerment Center for free, one-on-one support on how to make college and career savings part of your financial plan. NYC Financial Empowerment Centers are located throughout the city.  A professional financial counselor can help you understand and make a plan to pay off your debt, improve your credit, create a budget, open a bank account, and more. You can also ask for information about saving for your child’s future and support with making a deposit into a college and career savings account that you own for the benefit of your child. To schedule an appointment at an NYC Financial Empowerment Center near you, call 311 and say “Financial Counseling” or visit the 311 website.

Finished setting up your college and career savings account?

Click below to move to the next step in your Save for College Program journey.

 

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