5% Coverdell ESA CDs at WaMu
WaMu (Washington Mutual) has some very good rates for Coverdell ESA CDs: Their 13-17 month Coverdell CDs are yielding 5.00% APY, as are their 48-120 month Coverdell CDs. The minimum deposit is only $100, although there is a yearly maximum of $2000 of new money for all Coverdell accounts for a single beneficiary (a requirement of Coverdell accounts, not a WaMu requirement). You could transfer over more than $2000 from another Coverdell account, however.
WaMu has many locations throughout the United States.
529 Savings Plan State Tax Deductions and Credits
The vast majority of 529 savings plans, despite their state affiliation, are actually open to anyone in the United States who wants to open them (including people from states that don’t have a 529 savings plan). So what incentive is there to open a 529 account in your home state? In many cases, a lot. Of the 47 states that have 529 savings plans, 34 have them have some sort of state tax incentive — either a tax deduction or tax credit — for in-state residents who invest in their 529. Sometimes this incentive is substantial: Colorado, New Mexico, South Carolina, and West Virginia all allow residents to deduct on their state taxes the entire amount they invest in their local state’s 529 savings plan. Sometimes this incentive is small: For Maine, the deduction is only on the first $250 invested. Three states, Arizona, Kansas, and Pennsylvania, will allow residents to take a deduction on any 529 savings plan, even those plans not in the residents’ home states.
Because of the vast differences among states and the deductions and credits allowed, we list below every state that offers a 529 plan and what their state tax incentive is, or isn’t.
Alabama Higher Education 529 Fund: no state tax deductions or credits
Alaska T. Rowe Price College Savings Plan/John Hancock Freedom 529 Plan/University of Alaska College Savings Plan: no state tax deductions or credits
Arizona Fidelity College Savings Plan/InvestEd Plan: up to $750/year in deductions for single filers and $1,500/year for joint filers (deductions available to Arizona residents investing in any state’s 529, not just Arizona’s)
Arkansas GIFT College Investing Plan: up to $5,000/year in deductions for single filers and $10,000/year for joint filers
California ScholarShare: no state tax deductions or credits
Colorado Scholars Choice College Savings: full deduction on all money invested
Connecticut Higher Education Trust: up to $5,000/year in deductions per beneficiary for single filers and $10,000/year per beneficiary for joint filers
Delaware College Investment Plan: no state tax deductions or credits
DC 529 College Savings Plan: up to $3,000/year in deductions for single filers and $6,000/year for joint filers
Florida College Investment Plan: no state tax deductions or credits
Georgia Path2College 529 Plan: $2,000/year in deductions per beneficiary
Hawaii’s College Savings (HI529): no state tax deductions or credits
Idaho College Savings Program (IDeal): up to $4,000/year in deductions per beneficiary for single filers and $8,000/year per beneficiary for joint filers
Illinois Bright Start College Savings/Bright Directions College Savings: up to $10,000/year in deductions for single filers and $20,000/year for joint filers
Indiana CollegeChoice 529 Investment Plan: 20% tax credit, maxed out at $1,000/year
Iowa Advisor 529 Plan/College Savings Iowa: $2,595/year in deductions per beneficiary
Kansas Learning Quest/Schwab 529 College Savings Plan: up to $3,000/year in deductions per beneficiary for single filers and $6,000/year for joint filers (deductions available to Kansas residents investing in any state’s 529, not just Kansas’)
Kentucky Education Savings Plan Trust: no state tax deductions or credits
Lousiana Student Tuition Assistance and Revenue Trust (START): up to $2,400/year in deductions per beneficiary for single filers and $4,800/year per beneficiary for joint filers
Maine NextGen College Investing Plan: up to $250/year in deductions per beneficiary for filers with income under $100,000 ($200,000 for joint filers)
Maryland College Investment Plan: up to $2,500/year in deductions per beneficiary
Massachusetts College Investing Plan (U.Fund): no state tax deductions or credits
Michigan Education Savings Program: up to $5,000/year in deductions per beneficiary for single filers and $10,000/year per beneficiary for joint filers
Minnesota’s College Savings Plan: no state tax deductions or credits
Mississippi Affordable College Savings Plan: up to $10,000/year in deductions for single filers and $20,000/year for joint filers
Missouri 529 College Savings Plan (MOST): up to $8,000/year in deductions for single filers and $16,000/year for joint filers
Montana Family Education Savings Program: up to $3,000/year in deductions for single filers and $6,000/year for joint filers
Nebraska AIM College Savings Plan/College Savings Plan of Nebraska/TD Waterhouse College Savings Plan: up to $5,000/year in deductions
Nevada Columbia 529/UPromise College Fund/USAA College Savings Plan/Vanguard 529 College Savings Plan: no state tax deductions or credits
New Hampshire’s UNIQUE College Investing Plan: no state tax deductions or credits
New Jersey’s BEST Educational Savings Trust/Franklin Templeton 529: no state tax deductions or credits
New Mexico’s CollegeSense 529/Scholar’sEdge/The Education Plan: full deduction on all money invested
New York’s College Savings Program/College Savings Program Advisor Program: up to $5,000/year in deductions for single filers and $10,000/year for joint filers
North Carolina National College Savings Program: up to $2,500/year in deductions for single filers and $5,000/year for joint filers
North Dakota College SAVE: up to $8,000/year in deductions for single filers and $16,000/year for joint filers
Ohio CollegeAdvantage Savings Plan/Putnam CollegeAdvantage Savings: up to $2,000/year in deductions per beneficiary
Oklahoma College Savings Plan: up to $10,000/year in deductions for single filers and $20,000/year for joint filers
Oregon College Savings Plan/MFS 529 Savings Plan/Oppenheimer Funds 529: up to $2,000/year in deductions for single filers and $4,000/year for joint filers
Pennsylvania College Savings: up to $12,000/year in deductions per beneficiary for single filers and $24,000/year for joint filers (deductions available to Pennsylvania residents investing in any state’s 529, not just Kansas’)
Rhode Island CollegeBoundfund: up to $500/year in deductions for single filers and $1,000/year for joint filers
South Carolina Future Scholar 529 College Savings: full deduction on all money invested
South Dakota College Access 529: no state tax deductions or credits
Texas Lonestar/Tomorrow’s College Investment Plan: no state tax deductions or credits
Utah Educational Savings Plan Trust: up to $82.50 in tax credits
Vermont Higher Education Investment Plan: state tax credit of 10% on the first $2,000 in contributions per beneficiary, up to $250 per beneficiary per taxpayer
Virginia Educational Savings Trust/CollegeAmerica: up to $2,000/year in deductions (to be raised to $4,000 in 2009)
West Virginia Direct SMART529/Hartford SMART529/SMART 529 Select College Savings: full deduction on all money invested
Wisconsin EdVest College Savings Program/Tomorrow’s Scholar: up to $3,000/year in deductions per beneficiary
List of all Prepaid Tuition Plans
Following up on our list of 529 college savings plans yesterday is a list of the other category of 529 plans: prepaid tuition plans. This list is accurate as of September 1st, 2008. Currently 13 states have a prepaid tuition plan, and a 14th plan, the Independent 529 Plan, is affiliated with selected private colleges rather than a state.
Prepaid tuition plans often have stricter and more complicated rules than 529 college savings plans, so be sure to investigate any prepaid tuition plan fully before deciding to invest.
| Alabama | Prepaid Affordable College Tuition (PACT) | |
| Florida | Florida Prepaid College Plan | |
| Illinois | College Illinois! | |
| Kentucky | Kentucky’s Affordable Prepaid Tuition | |
| Maryland | Maryland Prepaid College Trust | |
| Massachusetts | U.Plan Prepaid Tuition Program | |
| Michigan | Michigan Education Trust | |
| Mississippi | Mississippi Prepaid Affordable College Tuition Program (MPACT) | |
| Nevada | Nevada Prepaid Tuition Plan | |
| Tennessee | Baccalaureate Education System Trust (BEST) Prepaid Tuition Plan | |
| Texas | Texas Guaranteed Tuition Plan | |
| Virginia | Virginia Prepaid Education Program (VPEP) | |
| Washington | Guaranteed Education Trust (GET) | |
| no state | Independent 529 Plan |
List of all 529 Savings Plans
Below is a list of all active 529 college savings plans as of September 1st, 2008. This list does not include prepaid tuition plans (I’ll list those in a post next week), and it does not separate direct and advisor plans that are otherwise the same.
Currently, 47 states and the District of Columbia have traditional 529 savings plans. (Two of the states that don’t, Tennessee and Washington, do have prepaid tuition plans. Wyoming has neither.) There are currently 78 unique 529 plans. Please remember that you do not need to open up a 529 plan from your state — most 529 savings plans are open to anyone wishing to open one. [Note: The previous paragraph was updated on September 8th to clarify that Montana does not have its own 529 plan; it asks residents to invest in Colorado's.]
529 Plan CDs up to 4.75% at Fifth Third Bank
Fifth Third Bank, through the Ohio Tuition Trust Authority’s College Advantage 529 Plan, is unusual in that they’re offering CDs as part of a 529 Plan. For most people invested in 529s, CDs are probably not the best investment option — you’re potentially giving up gains for security — but for those who would rather have their money stay on the safer side, this might be a very good option.
Some of their current 529 CD rates are:
- 24-to-35-month CDs: 4.00% APY
- 36-to-47-month CDs: 4.75% APY
- 48-month-and-up CDs: 4.50% APY
These 529 Plan CDs have a minimum deposit of $500. The terms listed above have a early termination penality of the greater of 6 months of interest half the stated interest for remaining term.
If you’d like to invest in one of Fifth Third’s 529 CDs, you can call visit any Fifth Third Bank branch, call 800-233-6734, or visit CollegeAdvantage.com.
