Savingforcollege.com has published an update of FDIC-insured products in the marketplace for 2019. 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 2019, there were 28 plans offering a federally-insured investment option, which include savings accounts and bank certificates of deposits (CDs). This is up from 26 plans in 2018.
The study finds that yields on these products vary widely, ranging from 0.15% to 2.60% for savings accounts, to 1.41% to 2.75% for CDs, depending on the duration. Total annual asset based fees for plans offering an FDIC-insured product ranged from 0.10% to 0.50%
At the time of the study, the highest-yielding CD options were available through the Arizona Family College Savings Program (AFCSP) – Bank Plan, Indiana’s CollegeChoice CD Savings Plan and Ohio’s CollegeAdvantage Direct 529 Savings Plan.
Among 529 plans offering savings accounts, the highest yields (net of fees) were offered by the Utah my529 plan, the Arizona AFCSP – Bank Plan, Indiana’s CollegeChoice CD 529 Savings Plan, and North Carolina’s NC 529 Plan.
FDIC-insured products in the 529 marketplace was researched and produced by Savingforcollege.com.