A Safe Way to Save for College During the Coronavirus Pandemic

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Kristen Kuchar

By Kristen Kuchar

April 2, 2020

With a scary stock market and an unpredictable economy, investing can seem like the last thing you want to do right now. You might be hesitant to invest in a 529 college savings plan right now in the midst of the coronavirus-induced bear market. However, an FDIC-insured 529 college savings plan could be exactly what you’re looking for.

These 529 plan investment options are insured by the federal government, through either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Because these plans are backed by the full faith and credit of the U.S. government up to certain limits ($250,000 per account holder per institution), federally-insured products are suitable for conservative investors interested in preserving capital without taking on excess risk. 

Unlike the stock market, these investments will not lose value. The potential return on investment from interest income is lower, but so too is the investment risk. 

There are 18 states that 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 with the uncertainty of COVID-19.

 States that offer FDIC-insured investment options within 529 plans


529 Plan

FDIC-Insured Investment Option


GIFT College Investing Plan

GIFT Plan Savings Portfolio

iShares 529 Plan

Savings Portfolio


AFCSP – Bank Plan

Savings Account

Fidelity Arizona College Savings Plan

AZ Bank Deposit Portfolio


Smart Choice College Savings Plan

Money Market Savings Account


Delaware College Investment Plan

DE Bank Deposit Portfolio


Idaho College Savings Program

Savings Portfolio


CollegeChoice Advisor 529 Savings

Savings Portfolio

CollegeChoice CD 529 Savings Plan

Savings Account

CollegeChoice 529 Direct Savings

Savings Portfolio


KY Saves 529

Capital Preservation Option


U.Fund College Investing Plan

MA Bank Deposit Portfolio


NextGen College Investing Plan – Client Direct

NextGen Savings Portfolio

NextGen College Investing Plan – Client Select

NextGen Savings Portfolio


Nebraska Education Savings Trust – Advisor

Bank Savings

Nebraska Education Savings Trust – Direct

Bank Savings

State Farm College Savings Plan

Bank Savings

New Hampshire

UNIQUE College Investing Plan

NH Bank Deposit Portfolio


SSGA Upromise 529

Savings Portfolio


CollegeAdvantage Direct 529 Savings Plan

Fifth Third 529 Savings Account


Oregon College Savings Plan

FDIC-Insured Option

South Carolina

Future Scholar 529 College Savings Plan – Advisor

Columbia Bank Deposit 529 Portfolio

Future Scholar 529 College Savings Plan – Direct Sold

Future Scholar Bank Deposit Portfolio


TNStars College Savings Program

TN First Interest Bearing Account



FDIC-Insured Option



FDIC-Insured Option


A good place to start:

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