18 States Offer FDIC-Insured 529 Plan Options

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Kathryn Flynn

By Kathryn Flynn

May 6, 2019

18 states offer 529 plan options that are insured by the Federal Deposit Insurance Corporation (FDIC), including high yield savings accounts and bank certificates of deposit (CDs). FDIC-insured investments are suitable for families who want to preserve capital in their 529 plan without taking on excess risk.

What are FDIC-insured investments?

FDIC-insured investments are backed by the full faith and credit of the United States government up to certain limits in the event of a bank failure. This is an attractive feature for families with a short time horizon to invest. If a student is approaching college or has already started college, they can take advantage of the tax benefits and flexibility of a 529 plan without risking their principal investment. The same strategy works for families who use a 529 plan to pay for K-12 tuition.

FDIC-insured options within 529 plans are also a good option for families who are risk-averse. For example, parents and grandparents who witnessed their retirement accounts or other savings get wiped out by the Great Recession may be hesitant to leave their child’s education fund at the mercy of volatile stock and fixed-income markets.

The states listed in this table offer at least one FDIC-insured investment option within a 529 plan. Two additional 529 plans offer similar investment options that are not FDIC-insured:

  • North Carolina’s National College Savings Program offers the Federally-Insured Deposit Account, which is insured by the National Credit Union Administration (NCUA)
  • Wisconsin’s Edvest 529 plan also offers CD investment options, but they are not FDIC-insured

States that offer FDIC-insured investment options within 529 plans

529 Plan
FDIC-Insured Investment Option
GIFT Plan Savings Portfolio
Savings Portfolio
AZ Bank Deposit Portfolio
Money Market Savings Account
DE Bank Deposit Portfolio
Savings Portfolio
Savings Portfolio
Savings Account
Savings Portfolio
Capital Preservation Option
MA Bank Deposit Portfolio
NextGen Savings Portfolio
NextGen Savings Portfolio
Bank Savings
Bank Savings
Bank Savings
New Hampshire
NH Bank Deposit Portfolio
Savings Portfolio
Fifth Third 529 Savings Account
FDIC-Insured Option
South Carolina
Columbia Bank Deposit 529 Portfolio
Future Scholar Bank Deposit Portfolio
TN First Interest Bearing Account
FDIC-Insured Option
FDIC-Insured Option

Source: 2019 FDIC-Insured Products in 529 Plans, Savingforcollege.com

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