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CollegeChoice CD 529 Savings Plan

FDIC-Insured or Stable Value Plan

FDIC-insured plans offer only federally insured products such as savings accounts or CDs. Stable Value plans offer a minimum annual rate of return. Because of the unique structure of these plans, they are not considered in our ratings methodology.

Two FDIC-insured options are offered in the CollegeChoice CD 529 Savings Plan: (1) fixed-rate CDs with one-year, two-year or three-year maturities, and (2) the Honors Savings Account, a high-yield savings account available from College Savings Bank, a Division of NexBank. The plan ceased offering InvestorSure CDs and CollegeSure CDs to investors as of August 2, 2016 and October 21, 2016. InvestorSure CDs and CollegeSure CDS issued prior to those dates will continue to be managed and serviced by CollegeSure until their maturity dates. As of May 31, 2024, the CollegeChoice CD 529 Savings Plan is closed to new enrollments.

OVERVIEW

Program type

Savings

Inception

2011

State agency

Indiana Education Savings Authority (IESA)

Tax deduction

For single filers: 20% amounting to up to $1,500/yr

For joint filers: 20% amounting to up to $1,500/yr

Program manager

College Savings Bank, a Division of NexBank

Program distributor

College Savings Bank, a Division of NexBank

Manager contract term

MORE INFORMATION

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

Individuals of legal age, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

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 Indiana's 529 plan for the same beneficiary reach $450,000.

Minimum contributions:

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 initial deposit 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.

Does the program offer an e-gifting platform for receiving gift contributions?

This plan does not offer an online gifting portal allowing for easy sharing but may offer gift certificates or allow mail-in gift contributions.

Other great plans to consider

You are not limited to your own state's 529 plan, so compare the plan and tax benefits offered by your state to other options. Here are some plans that are available to residents of any state and have earned awards in our 529 Plan Ratings:

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New York's 529 College Savings Program -- Direct Plan
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Investment Options

Age-based/Enrollment Year investment options:

None.

Static investment options:

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 currently features an APY of 0.75%.

Underlying investments:

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

Underlying fund allocations:

Portfolio Fees & Performance Lookup

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. No fees associated with the Honors Savings Account.

Taxes and other Benefits

Tax deduction for single filers:

20% amounting to up to $1,500/yr

Tax deduction for joint filers:

20% amounting to up to $1,500/yr

Program match on contributions:

None.

State tax deduction or credit for contributions:

Indiana taxpayers are eligible for a state income tax credit of 20% of contributions to an Indiana 529 Plan, up to $1,500 credit per year ($750 for married couples filing separately). Effective January 1, 2024, rollover contributions and contributions generated through a rewards program are not eligible for the credit. Effective January 1, 2023, the definition of an Indiana taxpayer was revised to include married individuals filing separately. The maximum annual credit allowed for a married taxpayer filing separately is $750. Indiana residents may elect to treat contributions made through the deadline (excluding extensions) for filing an individual Indiana state income tax return (generally April 15) as having been made in the prior year in order to claim the allowable annual credit on their Indiana state tax return for the prior year. Contributions default to the current contribution year; if you wish to have a contribution made before Tax Day count toward the prior calendar year, include a letter with a mailed check or contact the plan administrator to make the request.

Calculate your Indiana 529 tax benefit

Find out how much you can save on state taxes this year by contributing to a Indiana 529 plan.

Your tax savings per year

Tax Filing Status

Household income

$100,000

Monthly Contribution

$100

State tax recapture provisions:

The account owner (not the contributor) must repay all or part of the state income tax credit claimed by contributors in prior taxable years in a taxable year of the Recapture Distribution. A Recapture Distribution is a: non-qualified distribution (other than if the distribution is because of the death or disability of the beneficiary, or if the beneficiary received a scholarship that paid for all or part of the qualified expenses of the beneficiary (to the extent that the withdrawal or distribution does not exceed the amount of the scholarship), or a refunded distribution); distribution used to pay K-12 tuition for a school outside of Indiana; effective January 1, 2020, distribution used to make education loan repayments; rollover distribution; or termination of an account within twelve months after the account was opened.

State definition of qualified expenses

The state definition of qualified education expenses includes expenses for higher education and apprenticeship programs, as well as up to $10,000 per year in tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school. Education loan repayments are not considered as a qualified education expense. Distributions from a 529 account directly to a Roth IRA are not considered a qualified expense for state income tax purposes.

State tax treatment of qualified distributions:

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

State tax treatment of rollovers:

Indiana follows federal tax-free treatment except that outbound rollovers are subject to the recapture of prior state tax credits.

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

Yes

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

Is there a rewards program or outside scholarship program that works with this program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

Account owner, beneficiary or educational institution.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes and the program also offers Social Gifting.

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:

Contact

Website:

http://www.collegechoicecd.com

Telephone:

1-888-913-2885

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