In today’s economy, contributing to your child’s college education fund might be causing you more anxiety than peace of mind.
To help you rest at ease, the Utah Educational Savings Plan — in partnership with Zions Bank — has introduced the first-of-its-kind FDIC-insured savings account in the 529 plan realm that doesn’t have minimum deposit or balance requirements and is tax free if you withdraw from it to pay for higher education. Investment-research firm Morningstar Inc. recently named it one of the Top Five 529 savings plans in the country.
Funds in the savings account may be eligible for FDIC insurance on a pass-through basis to each UESP account owner up to the standard maximum deposit insurance amount set by federal law — currently $250,000 through 2013. You may wish to consult a professional adviser to determine if your account is properly established and the records are being properly maintained in accordance with FDIC requirements for “pass-through” insurance. Check www2.fdic.gov/EDIE for more
information.
Here’s how it works. To open a UESP account, go to www.uesp.org to find the account agreement form. Either complete the form online or print and mail it to P.O. Box 145100, Salt Lake City, Utah 84114-5100. Once the account is open, you can invest in it immediately or ease into it over time through UESP’s age-based investment options. Give as much and as often as you’d like by setting up automatic withdrawals from your checking or savings account, mailing a check, or contributing money online.
Due to the nature of this savings account, your money intended for college expenses is available when you need it. But before investing in UESP, be sure you read the program description (available at www.uesp.org) and understand all that this savings plan entails.
“I’m proud that UESP can offer this unique investment option,” says Lynne Ward, UESP director. “This option, as with all investment options at UESP doesn’t require an initial deposit or any minimum contributions, and doesn’t impose time restrictions for liquidation. One of UESP’s core values is that you can contribute whatever you want, whenever you want.
“An FDIC-insured savings account is a logical investment option for 529 participants who are eager to save for the future yet are skittish about today’s financial markets. This new investment option further enhances the value of our program and provides our investors with another way to save for college during challenging times. We are pleased to partner with Zions Bank in meeting the needs of our account owners.”
If accrued deposits and earnings in any UESP account are used for qualified higher education expenses, the account is exempt from all federal and Utah state taxes. In addition, if the account was opened before the beneficiary turned 19, the account owner can claim a Utah state tax credit.
Similarly, Idaho offers its residents state tax deductions for contributions made to the Idaho College Savings Program (IDeal). IDeal is a Upromise Rewards affiliate, meaning account owners accumulate additional college funds simply by shopping at participating retailers. A minimum contribution of $25 is required to participate with IDeal. Learn about IDeal’s investment options and other program details by reading the enrollment kit and disclosure statement available at www.idsaves.org.
Consult a tax adviser for details.
Featured in the July/August 2009 issue of Zions Bank’s Community magazine.
