About the BabySteps Savings Plan

The BabySteps Savings Plan (BabySteps) is a program that jump-starts families into saving for future education, vocational, and apprenticeship costs.

Children with college savings are 31% more likely to plan on attending college than children without college savings. BabySteps is here to help educate children, parents, and their communities about the value of planning early.  

Many families may have read about BabySteps when they filled out the Parent Worksheet for a birth certificate at the hospital. Those who sign up will receive a free $50 deposit into their child’s MEFA U.Fund 529 account from the Massachusetts State Treasurer’s Office. Every child who is a Massachusetts resident is eligible for a $50 BabySteps deposit within one year of his or her birth or adoption.

The first step is to open a MEFA U.Fund 529 account and name their child as the Beneficiary to receive the funds.

We invite families to use our online resources to learn about how to save for their child’s future. Visit the BabySteps Financial Education Classroom to start your plan today.

Who is eligible to receive the $50 seed deposit?

To be eligible to receive the $50 seed deposit provided by BabySteps, a child must:

Eligible MEFA U.Fund 529 accounts will receive their free $50 deposit approximately six weeks after the account opening. The account creator has 30 days from account opening to opt out of the program if he or she does not want the $50 deposit.

Families of children born or adopted over one year ago can open a MEFA U.Fund 529 account but are not eligible for the $50 seed deposit.

Frequently Asked Questions

How long will it take to receive the $50 deposit after I have created my child’s MEFA U.Fund 529 account?

Eligible BabySteps accounts will receive their free $50 deposit approximately 6 weeks after they are opened. The account creator has 30 days from account opening to opt out of the program if he or she does not want to receive the $50 deposit.

What is the BabySteps Savings Plan?

Every child born or adopted who is a Massachusetts resident will be eligible* to receive a $50 seed deposit into his or her MEFA U.Fund 529 account from the State Treasurer's Office.

*within one year of birth or adoption

How does the BabySteps Savings Plan work?

Families who want to participate in the BabySteps Savings Plan need to open a MEFA U.Fund 529 account. The account creator has 30 days from account opening to opt out of the program if he or she does not want to receive the $50 deposit. Eligible BabySteps accounts will receive the free $50 deposit approximately 6 weeks after they are opened. After opening the account, families can begin making contributions and will receive information about growing their children’s accounts.

Why open a MEFA U.Fund 529 account at birth?

Opening a MEFA U.Fund 529 account at birth allows more time for savings to accumulate and parents to make contributions to the account. Research shows at-birth children's savings account programs maximize the opportunity for a positive impact on children’s social-emotional health and development of college-bound identity.

What is a MEFA U.Fund 529 account?

Every savings account affiliated with the BabySteps Savings Plan will be a MEFA U.Fund 529 account, a tax-advantaged plan authorized by Section 529 of the Internal Revenue Code. A 529 account is designed to encourage saving for college, vocational school, and other education expenses. These accounts are specifically offered through the Massachusetts U.Fund, which is offered by MEFA and managed by Fidelity Investments.

How will this be funded?

The $50 deposits for BabySteps will be funded without the use of taxpayer dollars. Through the Economic Empowerment Trust Fund, public-private partnerships will be developed to fund the seed deposit. The founding sponsor of the program is the Hildreth Stewart Charitable Foundation, with additional funding support from MEFA.

Will the BabySteps program affect my public benefits?

Most public benefit programs are not affected by savings in a 529 account up to a certain limit. For more information please review this document.

Can I apply with a paper application form?

Yes! If you prefer to enroll using a printed form, you can download the application and supporting documents from the Fidelity Investments website.

Who is eligible?

Any child who is a Massachusetts resident and was born or adopted less than one year ago is eligible to receive a $50 seed deposit from the State Treasurer's Office into a MEFA U.Fund 529 account with that child as the Beneficiary. The $50 seed deposit can only be received within one year of the child's birth or adoption.

What should I do if my child was born before 2020?

At this time, we encourage all families to sign up for a MEFA U.Fund 529 account. However, only Massachusetts families who have a child born or adopted less than one year ago will be eligible to receive a $50 seed deposit into their MEFA U.Fund 529 account.

Although your child may not be eligible for the seed deposit, there are other programs in your community that might be available to you. Please check Massachusetts’ CSA Programs to see if there are programs that provide seed deposits or incentives for children in your city/town.

How do I opt out of the BabySteps Savings Plan?

Once you have created a MEFA U.Fund 529 account, you have 30 days to contact Fidelity Investments directly at 800-544-2776 and request not to receive the $50 seed deposit.

If a child has more than one MEFA U.Fund 529 account in his or her name, the child will still only receive one total $50 seed deposit and you are not required to opt out for future accounts.

Are ABLE accounts eligible for the BabySteps deposit?

ABLE accounts are not eligible for the BabySteps deposit. However, a family may open a MEFA U.Fund 529 account for a child, receive the $50 seed deposit into the 529 account, and then transfer those funds into an ABLE account for the same child without incurring any tax or penalty. The funds rolled over from the 529 account are subject to the annual contribution limit of $15,000 into an ABLE account.

Can someone, other than a parent, open the child’s MEFA U.Fund 529 account?

Yes! Any family member or loved one can open a child’s MEFA U.Fund 529 account as long as that person has all the necessary information.

Will this account affect my child’s financial aid eligibility?

529 assets have a relatively small effect on federal financial aid eligibility because they are considered assets of the parent in the Expected Family Contribution (EFC). Parent assets in 529 savings accounts (or any savings account) are treated at a rate of at most 5.6% in the EFC. Learn more about the effect on financial aid.

I already have a MEFA U.Fund 529 account. Can the $50 be deposited into the one that I already have?

At this time, you must open a new MEFA U.Fund 529 account in order to receive your $50 BabySteps seed deposit. Please know you are permitted to have more than one MEFA U.Fund 529 account for a Beneficiary. You may merge the accounts at a later time if you would like to do so.

What information do I need to create an account?

For the account holder (family member or loved one) you will need to provide your:

  • Name
  • Social Security Number or Employer Identification Number (EIN)/Federal Tax Identification Number
  • Date of Birth
  • Legal Address
  • Phone Number
  • Email Address
  • Employment Information (if employed)

For the Beneficiary (the child) you will need to provide his or her:

  • Name
  • Social Security Number
  • Date of Birth
  • Legal Address

What can the savings in a 529 be used for?

529 funds can be used to pay for:

  • K-12 tuition expenses ($10,000 per year)
  • Vocational school
  • Certain apprenticeship programs
  • College costs including tuition and fees, books and supplies, room and board, and special needs services
  • Repayment of qualified student loans up to $10,000

Is my child required to attend college or vocational school in Massachusetts?

No! Funds saved within the MEFA U.Fund 529 account can be used at any accredited college or vocational school across the U.S. and in other countries throughout the world. Check out this list to browse all eligible institutions.

Can anyone else contribute to my account?

Yes! Any family member or friend can add to your MEFA U.Fund 529 account through College Gifting.

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