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Montana Family Education Savings Program -- Bank Plan

Montana

Four FDIC-insured options are offered in this Montana Family Education Savings Program -- Bank Plan: (1) the CollegeSure CD with a variable interest rate pegged to a private-college tuition index, (2) the InvestorSure CD with an interest rate pegged to a percentage of the increase in the S&P 500 Index over a five-year period, (3) fixed-rate CDs with one-year or three-year maturities, and (4) the Honors Savings Account, a high-yield, variable rate savings account available exclusively online.

5-Cap Rating

Resident:
Non-Resident:

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)

Performance Costs Features Reliability Resident Upgrade
4.00 N/A 2.23 3.20 0.00

General

Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

1998

State agency(ies):

Montana Board of Regents of Higher Education

Program manager:

College Savings Bank

Program distributor:

College Savings Bank

Manager contract term:

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Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

Individuals of legal age, UGMA/UTMA custodians, state/local governments, and 501(c)(3) organizations. Joint ownership by spouses is permitted.

Significant time or age restrictions imposed by the program:

CollegeSureŽ CDs have maturities ranging from one year to 22 years. InvestorSure CDs have a five-year maturity. Fixed-rate CDs have one- or three-year maturities. The CDs are subject to early redemption penalties ranging from 1% to 10% of principal for withdrawals prior to maturity.

Contributions

Maximum contributions:

Accepts contributions until all account balances in Montana's 529 plans for the same beneficiary reach $396,000.

Minimum contributions:

CollegeSure CD:
With lump-sum contributions, the minimum initial contribution is $250. With the automatic investment plan, the minimum contribution level is $25 per month via electronic funds transfer, or $25 per payroll via payroll deduction. Deposits under $250 are held in an interest bearing savings account, and each time the balance reaches $250, a CD purchase is made.

InvestorSure CD:
With lump-sum contributions, the minimum initial contribution is $250. With the automatic investment plan, the minimum contribution level is $25 per month via electronic funds transfer, or $25 per payroll via payroll deduction. Deposits under $250 are held in an interest bearing savings account, and each time the balance reaches $250, a CD purchase is made on the next CD issue date.

Fixed Rate CDs:
With lump-sum contributions, the minimum initial contribution is $250. With the automatic investment plan, the minimum contribution level is $25 per month via electronic funds transfer, or $25 per pay period via payroll deduction. Deposits under $250 are held in an interest bearing savings account, and each time the balance reaches $250, a CD purchase is made.

Honors Savings Account:
The minimum contribution is $250 and must be contributed by electronic check through the state 529 program website or the College Savings Bank website.

Investment Options

Age-based investment options:

None.

Static investment options:

The interest rate on the CollegeSure CD is pegged to a private-college tuition index, less a margin percentage assigned at the time of purchase. The maximum rate in future years is set at a specified percentage over the first-year's rate. The InvestorSure CD has a five-year maturity, and earns interest tied to a percentage of the increase in the S&P 500 Index (70% as of May 1, 2012). Fixed-rate CDs earn interest at the rate posted at the time of purchase, and posted rates may change at any time. The Honors Savings Account earns interest at a variable rate which is reviewed periodically and published online.

Underlying investments:

FDIC-insured certificates of deposit and a high-yield savings account from College Savings Bank.

Underlying fund allocations:

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Investment performance link:

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Portfolio Fees & Performance Lookup

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Fees & Expenses

Enrollment or application fee:

None.

Account maintenance fee:

None.

Program management fees:

None

Expenses of the underlying investments:

Not applicable, interest rate on CD is tied to a formula.

Total asset-based expense ratio:

None

Taxes and other Benefits

Program match on contributions:

None.

State tax deduction or credit for contributions:

Contributions to Montana AND non-Montana 529 plans of up to $3,000 per year by an individual, and up to $6,000 per year by a married couple filing jointly, are deductible in computing Montana taxable income. Only contributions made by the account owner, the account owner's spouse, or the account owner's custodian/parent are deductible. Contribution deadline is December 31.

Value of in-state tax benefits:

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State tax recapture provisions:

The principal portion of rollovers, qualified withdrawals within three years of establishing the account, and nonqualified withdrawals from this plan are subject to Montana tax at the highest Montana marginal rate to the extent of prior Montana tax deductions, but only after removal of non-deducted contributions.

State tax treatment of qualified distributions:

Qualified distributions from Montana and non-Montana 529 plans are exempt.

State tax treatment of rollovers:

Montana follows tax-free treatment for rollovers into a Montana 529 plan. Montana tax treatment of rollovers out of a Montana 529 plan is unclear, as Montana law may require that the rollover be treated as a nonqualified withdrawal.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

No,

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Account owner or beneficiary.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership (but only to the beneficiary, or to the owner's spouse as part of a divorce proceeding).

Documents, Access & Reporting

Does participant have online password-protected access to account?

No

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Web site:

Click here to visit

Telephone:

1-800-888-2723

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