What are your big savings goals?
Despite the poetic ambitions of the artistic millennials I happen to associate with, I’m quickly learning not everyone has dreams of leaving the workforce early and traveling the world.
I know. It’s blowing my mind, too.
But I get it. You may want to save for a nice house for your family, work toward a happy retirement with your partner or help your kids get the best education possible.
So we found a rewards credit card that actually helps with your long-term savings goals.
It can even help you start a college fund for your kids!
Among other benefits, the Fidelity® Rewards Visa Signature® Card allows you to deposit up to 2% cash back directly into a 529 College Savings plan account.
That means your typical monthly purchases can help you contribute to your kids’ education.
What is a 529 Plan?
A 529 College Savings plan is a state-run investment plan that allows you to save money for college — for yourself or anyone else.
Most states provide a tax advantage and allow you to deduct 529 contributions from your state income taxes. As long as the money pays for college expenses, the beneficiary won’t pay taxes when they withdraw from the account, either.
Plus, instead of sitting in a savings account, the money you contribute to a 529 will be invested and grow over time, much like a retirement account. In short, it’s a great way to save money for college. As a parent, you can open a 529 plan for your children before they’re 18, or even before they’re born.
Open a 529 account with Fidelity in your state, and you can deposit your cash-back rewards from the Fidelity® Rewards Visa Signature® Card directly into that account.
How Does the Fidelity® Rewards Visa Signature® Card Work?
This rewards card is all about helping you achieve your savings goals — and is giving you a head start with a $100 sign-up bonus for linking the card to your Fidelity account.
(***Editor’s Note: Fidelity is no longer providing the sign-up bonus, but the rest of the following rewards still apply.)
With the card, you’ll also receive unlimited 2% cash back for every purchase to deposit into an eligible Fidelity account — with no category restrictions.
You can also redeem rewards points for travel, merchandise, gift cards or statement credit, at varying redemption values.
There’s no annual fee to use the card or a limit on how many points you can accumulate. Once you accrue 5,000 points, you can make a deposit.
You can put your cash-back rewards into up to five accounts — yours or someone else’s — including a brokerage account, Fidelity Cash Management Account, 529 College Savings plans and retirement accounts.
Use it for your typical purchases and pay off your balance each month, and this credit card could be a smart way to start investing in your family’s major goals.
How Much Can You Save?
Use your Fidelity® Rewards Visa Signature® Card for your basic monthly purchases, and the rewards could add up fast.
If you use your credit card for $2,500 in monthly expenses, for example, you’ll earn 5,000 points toward Fidelity rewards. That’s about $50 to add to your 529 account each month.
Do that every month for 18 years, and you’ll have invested $10,800 in rewards.
Considering a typical 7% return, that monthly investment could become $21,165 by the time the lucky beneficiary is headed to college.
That’s a pretty big dent in tuition without any out-of-pocket contributions!
Are you ready to start saving? Enter your information below to find out if you qualify.
Your Turn: Have you started a college fund for your kids?
This post was updated on August 18, 2016, to correct a mathematical error.
Disclosure: A toast to savings! Thanks for allowing us to place affiliate links in this post.
Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).