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College
Planning
Saving
for college can be
extremely difficult.
529 plans were
offered by states to
help parents save money
for college for their
children in a tax
deferred account.
Recently,
inflation and tumultuous
stock prices have seen
529 plans be seen as a
less
stable way to
save for college.
In response to
the recent market
volatility, six states
currently offer federal
deposit insurance for
529 plans. Some
examples are listed
below.
529
Plan and FDIC-Insured
Saving Options
Ohio
CollegeAdvantage 529
Savings PlanCDs
and a savings account
from Fifth Third Bank.
CD yields range
from 2% for 3-5 month
CDs to 5% for 10-12 year
CDs.
Savings account yields
range from 1% on
balances under $5,000 to
1.5% on balances of
$100,000 or more.
Arizona
Family College Savings
Program - CollegeSure®
529 PlanCDs from
College Savings Bank.
CollegeSure CD:
pegged to a
private-college tuition
index, less a 3% margin,
not to fall below 2%
annually (e.g., over the
one-year period ended
July 31, 2008, the
college inflation rate
was 5.49%, so the CD
yield was 2.49%).
Maturities from 1 to 22
years.
InvestorSure
CD: a 5-year
CD, earns interest tied
to a percentage of the
increase in the S&P
500 Index (between 85%
and 100%). If the
S&P 500 declines
over the holding period,
investors get back their
principal. Five-year
maturity.
Fixed-rate
CDs: yields
vary based on maturity
and minimum investment,
ranging from 1.75% for a
1-year CD ($500 minimum
deposit) to 2.95% for a
3-year CD ($10,000
minimum deposit).
Maturities: 1- and
3-year. Montana Family
Education Savings
Program –
CollegeSure®
529 Plan Offers
the CollegeSure and
InvestorSure CDs from
College Savings Bank.
(See above for details.)
CollegeWealth
Virginia
FDIC-insured
savings accounts from
Union Bank & Trust
and two regional
affiliates, Northern
Neck State Bank and
Rappahannock National
Bank. Yields
range from 1.2-1.9%,
depending on account
size. No CD options yet
available. The state is
working to have more
community banks join the
program and start
offering products, as
well as to allow
participants to purchase
FDIC-insured products
online. EdVest Wisconsin
(Direct-sold plan only)Purchase
shares in bank- or
credit-union CDs.
(Individual CDs are
purchased by the state;
a cash reserve is kept
to meet withdrawals so
consumers do not incur
penalties for
“breaking” the CD.)
Yields change daily.
Utah Educational
Savings PlanSavings
account from Zions First
National Bank.
The rate is indexed to
Utah's Public
Treasurer’s Investment
Fund, which invests in
government securities,
commercial paper and
corporate debt. Resets
monthly.
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