18 States Offer FDIC-Insured 529 Plan Options
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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

State 529 Plan FDIC-Insured Investment Option
Arkansas GIFT College Investing Plan GIFT Plan Savings Portfolio
iShares 529 Plan Savings Portfolio
Arizona AFCSP – Bank Plan Savings Account
Fidelity Arizona College Savings Plan AZ Bank Deposit Portfolio
Colorado Smart Choice College Savings Plan Money Market Savings Account
Delaware Delaware College Investment Plan DE Bank Deposit Portfolio
Idaho Idaho College Savings Program Savings Portfolio
Indiana CollegeChoice Advisor 529 Savings Savings Portfolio
CollegeChoice CD 529 Savings Plan Savings Account
CollegeChoice 529 Direct Savings Savings Portfolio
Kentucky KY Saves 529 Capital Preservation Option
Massachusetts U.Fund College Investing Plan MA Bank Deposit Portfolio
Maine NextGen College Investing Plan – Client Direct NextGen Savings Portfolio
NextGen College Investing Plan – Client Select NextGen Savings Portfolio
Nebraska 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
Nevada SSGA Upromise 529 Savings Portfolio
Ohio CollegeAdvantage Direct 529 Savings Plan Fifth Third 529 Savings Account
Oregon 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
Tennessee TNStars College Savings Program TN First Interest Bearing Account
Utah my529 FDIC-Insured Option
Virginia Invest529 FDIC-Insured Option

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

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