2009-2010 EDITION

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Arizona Family College Savings Program - CollegeSure® 529 Plan

Arizona

Three FDIC-insured options are offered in this 529 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, and (3) fixed-rate CDs with one-year or three-year maturities.

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General

Did you know?

Residents are not limited to investing in their own State's plan. Another state may offer a plan that performs better and has lower fees. If there is no tax break offered for in-state investors... shop around!

Also, the plan chosen does not affect which state the student enrolls in. An investor can live in NY, invest in a plan from NV and send a student to college in FL.

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Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

1999

State agency(ies):

Arizona Commission for Postsecondary 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, and legal entities; joint ownership by spouses is permitted

Significant time or age restrictions imposed by the program:

CollegeSure® 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.

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Contributions

Maximum contributions:

Accepts contributions until all account balances in Arizona's 529 plans for the same beneficiary reach $340,000.

Minimum contributions:

CollegeSure CD: With lump-sum contributions, the minimum initial contribution is $250. With the automatic investment plan, the minimum contribution level is $100 per portfolio per month or $250 per quarter via bank transfer, or $25 per pay period via payroll deduction.

InvestorSure CD: With lump-sum contributions, the minimum initial contribution is $500. With the automatic investment plan, the minimum contribution level is $250 per month via bank transfer, or $100 per pay period via payroll deduction. Deposits under $1,000 are held in an interest bearing savings account, and each time the balance reaches $1,000, a CD purchase is made.

Fixed Rate CDs: With lump-sum contributions, the minimum initial contribution is $500. With the automatic investment plan, the minimum contribution level is $250 per month via bank transfer, or $100 per pay period via payroll deduction. Deposits under $500 are held in an interest bearing savings account, and each time the balance reaches $500, a CD purchase is made.

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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 3% margin. CDs with maturities less than 4 years will have a 0% floor while CDs with maturities of 4 to 22 years will have a 2% floor. (If average private-college tuition increases by 6% over the term, the yield is 3%.) The InvestorSure CD has a five-year maturity, and earns interest tied to a percentage of the increase in the S&P 500 Index (between 85% and 100%). Fixed-rate CDs earn interest at the rate posted at the time of purchase, and posted rates may change at any time.

Underlying investments:

FDIC-insured certificates of deposit 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.

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Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

In 2008 through 2012, contributions to Arizona and non-Arizona 529 plans of up to $750 per year for an individual taxpayer, and $1,500 per year for a married couple filing jointly, are deductible in computing Arizona taxable income.

Value of in-state tax benefits:

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State tax recapture provisions:

The principal portion of nonqualified withdrawals from this plan are included in Arizona taxable income to the extent of prior Arizona tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability, withdrawals made on account of the beneficiary's receipt of a scholarship, or rollovers.