Publishes New Study On 529 Plans Offering FDIC-Insured Investment Options

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FDIC-insured investments are a niche product for conservative investors, but there is demand there., a leading independent college savings resource and authority on 529 plans, conducted a study to review and compare plans that offer FDIC insured products. The study found that yield on FDIC-insurance products varied widely, ranging from 0.03% to 0.92% for savings portfolios to 0.25% to 2.00% 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%, and nine plans charged account maintenance fees unless certain conditions were met.

At the time of the study, the Utah Educational Savings Plan offered the highest APY net of fees, at 0.92%, followed by the Arizona Family College Savings Program - Bank Plan (0.90%) and Indiana’s CollegeChoice CD 529 Savings Plan (0.90%), both managed by College Savings Bank, a division of NexBank SSB. The study also examined cost versus returns, looking at published fees as reported by the plans. A wide disparity and lack of correlation was found between expense ratios and yield, where plans with no fees, including Ohio’s CollegeAdvantage Direct 529, the Arizona Family College Savings Program - Bank Plan and CollegeChoice CD achieved the highest yields with zero fees, and Achieve Montana, which has above-average costs and a low yield.

“FDIC-insured investments are a niche product for conservative investors, but there is demand there,” said Brian Boswell,’s vice president of research and development. “This study found that these products can vary greatly from plan to plan. Families interested in using FDIC-insured products inside a 529 plan would do well to look carefully at fees, yields, withdrawal restrictions and penalties before participating.”

FDIC-insured investments are backed by the full faith and credit of the U.S. government up to certain limits in the event of a bank failure. Currently, there are 24 college savings plans that offer an FDIC-insured investment option, which include savings accounts and bank certificates of deposits (CDs). These products allow families to take advantage of the tax benefits and flexibility offered by 529 plans, without risking their principal investment.

This study was sponsored by CollegeSavings Bank, a division of Nexbank SSB. To download the complete report, click here.

About has been a leading independent authority on 529 college savings plans since 1999. The site compiles and analyzes data, and creates content and tools to provide parents, financial professionals and state agencies with resources to help them understand how to meet the challenge of increasing higher education costs.

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Kathryn Flynn
Saving For College LLC
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