College Savings Bank Launches InvestorSure CD for Montana Family Education Savings Program
Another safe way to save for your child’s future has been introduced by College Savings Bank. The InvestorSure CD is a new, equity linked certificate of deposit that unlike many other investments, does not put your initial investment at risk if held to maturity. It provides a safe and affordable way to participate in the rewards of the Standard & Poor’s 500 Composit Stock Index (S&P 500) while saving for your child’s education.
The first InvestorSure CD was issued on February 1, 2008 and total deposits exceeded $1 million. College Savings Bank hopes to continue to see more and more customers explore this new method of saving and participate in a plan that has a rate of return based on the S&P index. But remember, with the InvestorSure CD, your principal is protected and you have the ability to see gains, without the risk that other investments may have as long as you hold the investment till maturity. Early withdrawals from the InvestorSure CD are permitted, however they are limited to once per year, and include a 10% principal penalty, and any applicable tax penalties.
The CollegeSure CD will continue to offer an annual 2 percent floor rate, while the InvestorSure CD is sold with a 0 percent floor rate. While both products are generally labeled conservative the InvestorSure CD may carry more risk-and potentially offer more reward.
“The InvestorSure CD allows college savers the ability to see the upside based on the stock market, without the accompanying market risk,” said Linda Green, AVP and College Savings Adviser. “Customers may want to place balances between both in order to see the potential advantages of both products.”
While historical rates of return are never a guarantee of future performance - if the InvestorSure CD was available, the previous 80 maturing CDs (ending October 2007) would have produced an average annual percentage yield (APY) of at least 5.32%.With the InvestorSure CD, there’s no guessing; your principal stays safe and grows in relation to the market.
The InvestorSure CD is available through the Montana Family Education Savings Program (MFESP)-Montana’s State Sponsored 529 Plan, and provides much of the same benefits as the CollegeSure CD. It is offered without fees or management charges and is FDIC insured to at least $100,000 per depositor, so your princpal is protected. Unlike the CollegeSure CD, however, investors will receive at least 85% of the average increase in the performance of the S&P 500 from issue date through maturity. The time to maturity will be 5 years with the option of rolling the money, into another InvestorSure CD, CollegeSure CD, Accumulator Account or another 529 plan.
College Savings Bank will issue the InvestorSure CD 4-times a year and accept funds everyday for the investment. Contributions will be held in an InvestorSure Accumulator account, with an (APY) of 2.02%, until issue date. InvestorSure Accumulator Accounts with a balance of $1,000 or more will automatically purchase an InvestorSure CD on the next issue date. InvestorSure CDs will pay, based on a formula, at least 85% of the increase in the performance of the S&P 500 through issue date to maturity.
The InvestorSure CD may also be state income tax-deductible for Montana residents. Montana residents may able to deduct the amount of their contributions from Montana taxable income up to $3,000 per taxpayer ($6,000 for married couples filing jointly).
Contributors outside of Montana can still enjoy earnings that grow tax-free and when the time comes to use the money for college, your earnings are distributed income tax free as well, to pay for qualified higher education expenses.
Deposit options are also available with the InvestorSure CD. You can mail in deposits of as little as $500, or sign up for a direct deposit program. Direct deposits from your bank or brokerage account are as low as $250 a month. Payroll direct deposits are as little as total deposits of $100 per pay period. Investors must contribute at least $1,000 to purchase an InvestorSure CD. It is another way that College Savings Bank has made saving for your child’s future convenient and smart.
The InvestorSure CD is designed for families who value hard earned money. College Savings Bank acknowledges that there are different types of investors; but each may find value in the InvestorSure CD. Conservative savers will want to invest in a way that protects principal. More liberal savers are likely to take risks in order to gain principal in a shorter period of time. College Savings Bank has made it possible to please both types of investors with the InvestorSure CD, because it incorporates both conservative and more risky investing strategies.
“The best part about this new product is that it offers a second, conservative investment option in our 529 plan. Your principal will be safe and guaranteed, and you could see considerable returns from the InvestorSure CD when the market is up versus starting point from issue. It takes the worry out of your investment,” said Linda Green.
The InvestorSure CD protects your child’s college savings and therefore safeguards their future education. Unlike other investments, the InvestorSure CD from College Savings Bank offers a principal guarantee if held to maturity, so should S&P 500 lose value after issue, deposits will not suffer principal loss. Losing principal in the stock market is a real risk, but not with the InvestorSure CD.
“The InvestorSure CD is perfect for those who are familiar with the advantages of the stock market, as well as those who are not quite sure about investing their money in the stock market. The InvestorSure CD allows your money to be protected if there is a decline in S&P 500, and allows your money to grow if there are S&P 500 highs. It’s perfect for people who want to invest their money wisely and safely,” said Linda Green.
You can join the other 15,000 customers today taking advantage of the two products from College Savings Bank. College and university costs will not be decreasing in the future, so it is important to think ahead and invest your money wisely. With the InvestorSure CD and the CollegeSure CD, it’s easy to plan ahead for the higher education of your child.
For more information, please call a College Savings Bank Adviser at 1-800-888-2723 or visit our web site, www.collegesavings.com. College Savings Bank customers are always encouraged to visit our web site for more information, news, and feedback.