While ABLEnow accounts are designed to be as financially accessible as possible, we are often asked about costs. Occasionally, people are surprised there are fees associated with ABLE accounts at all.
In this article, we’ll pull back the curtain on the two main fees associated with ABLE programs, share tips on comparing ABLE program fees and explain some reasons behind the fees.
Types of fees
Prior to opening an ABLEnow account, applicants must agree that they have reviewed the Program Description, which includes the Account Fee Schedule.
All ABLE programs have two main fees:
-
Account Service Fees cover the administrative costs necessary to develop the ABLE program and keep it running. ABLEnow offers some of the lowest Account Service Fees in the country, with a $39 per year Account Service Fee, payable at $3.25 per month. This fee is the same for all customers, regardless of their state of residence.
Don’t want to pay the Account Service Fee? This monthly fee is waived for ABLEnow customers who maintain an average daily balance of $10,000 in the ABLEnow Deposit Account. This is a unique feature of the ABLEnow program.
-
Asset Management Fees are collected by an investment manager for managing a fund. The fee is intended to compensate the managers for choosing stocks and managing the portfolio. ABLEnow investment options include a Fidelity® Money Market portfolio and a selection of highly rated Vanguard LifeStrategy funds, popular because of their low costs and historically high returns relative to risk.
ABLEnow’s Asset Management Fees are assessed quarterly on the total assets in the account. Depending on investment choices, the total fees range from 0.37% to 0.40%.
Don’t want to pay the Asset Management Fees? ABLEnow account owners have the option to keep all their funds in the FDIC-insured ABLEnow Deposit Account. These customers avoid Asset Management Fees, but may miss out on the advantages of long-term investing.
Comparing programs
ABLE programs offer different fee structures. The ABLE National Resource Center offers a helpful tool to compare programs.
In addition to state tax benefits and program fees, be sure to consider the other features that make it easy to contribute, manage and use your ABLE account.
| Program Element |
ABLEnow |
Other ABLE Programs |
| Account service fee |
Same for all customers |
May be up to 40% higher for non-residents |
| Debit or purchasing card |
Free for all customers |
May cost up to an additional $24 a year |
| Website for gift contributions |
Free for all customers |
May not be offered |
| Customer service |
In-house ABLE experts |
May be outsourced to third-party organization |
| Initial minimum contribution |
$0 |
May be up to $50 |
| Subsequent minimum contribution |
$0 |
May be up to $25 |
| Rollover to another ABLE program |
$0 |
May be up to a $50 fee |
A few ABLE programs opened with free or reduced Account Service Fees for a limited time to attract customers. Like any introductory offer, be aware these fees may increase once the marketing budget or state subsidy ends.
So, why are there fees?
Virginia529, which administers the ABLEnow program, is an independent Virginia state agency that does not receive a general fund appropriation from the state. Operating expenses are primarily funded from program fee revenue.
To keep fees low, ABLEnow offers enrollment and account management online. However, there are still expenses to administer the program. For example, the underlying technology that allows customers to securely save and move their money as well as efforts to provide people with program information are just a few of the costs associated with running an ABLE program.
Importance of growth
Since its national launch in December 2016, ABLEnow has grown to be the country’s largest independent ABLE program. While a Virginia-sponsored ABLE program is mandated by state law, continued growth is critical for ABLEnow’s long-term success and sustainability.
ABLEnow is open to eligible individuals across the country. We strive to offer a national ABLE program that’s financially accessible to all Americans with disabilities. One of the many ways we’re doing this is by offering fees that are as reasonable and transparent as possible.
Developing a strong, viable program gives ABLEnow the opportunity to build the scale that could reduce program costs even further. According to the ABLE National Resource Center, millions of ABLE-eligible individuals have not opened an ABLE account and many are still unaware of their existence. You can help by sharing information about new ABLE accounts and the ABLEnow program with your community.
This article is part of a series where we answer ABLE-related questions that we’re hearing from customers and the disability community. Read our previous article, Why Should I Trust ABLEnow?
Please contact us with questions and topics you’d like to see in the future.
