Savingforcollege.com has just published an update of FDIC-insured products in the 529 marketplace for 2018. The report, first published in 2017, compares the federally-insured investment options offered by 529 college savings plans.
The study examines 529 plan investment options insured by the federal government, through either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF). Because they are backed by the full faith and credit of the U.S. government up to certain limits, federally-insured products are suitable for conservative investors interested in preserving capital without taking on excess risk. As of April 2018, there were 26 plans offering a federally-insured investment option, which include savings accounts and bank certificates of deposits (CDs). This is up from 23 plans in 2017.
The study finds that yields on these products vary widely, ranging from 0.03% to 2.05% for savings accounts, to 0.25% to 2.15% for CDs, depending on the duration. Total annual asset based fees for plans offering an FDIC-insured product ranged from 0.00% to 0.67.
At the time of the study, College Savings Bank, a Division of NexBank SSB, offered the highest yield on 1-, 2-, and 3-year maturity CD products, and the highest overall yield via its 3-year CD, through two 529 plans:The Arizona Family College Savings Program – Bank Plan (AFCSP – Bank Plan) and the College Choice CD 529 Savings Plan.
Among 529 plans offering savings accounts, the highest yields (net of fees) were offered by these plans:the Utah my529 plan, South Carolina’s Future Scholar plan (both Advisor- and Direct-sold versions), the Arizona AFCSP – Bank Plan, Indiana’s CollegeChoice CD 529 Savings Plan, and North Carolina’s National College Savings Program.
FDIC-insured products in the 529 marketplace was researched and produced by Savingforcollege.com and sponsored by College Savings Bank, a division of NexBank SSB.
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