3/18/2008: The Economy in a Slump--Put Your Money Somewhere Safe
Since 2007, there has been discussion of a possible recession starting in late 2007 or early 2008. Instability has led to significant declines in equity markets around the world, causing many investors to face their losses. It's a serious issue for many, but with the right resources you can protect your money from volatility. At College Savings Bank, conservative saving tools help to protect deposits. With college costs rising at double the inflation rate, now is the perfect time to put away savings safely for the future.
A report by the UN Information Services in January 2008 said, the baseline forecast of the United Nations is for world economic growth to average 3.4 per cent this year, following the trend line down from 3.9 per cent in 2006 and 3.7 per cent in 2007.
"I believe that any time you're in the position like we are today, that you must have defensive strategies in place to help protect you from a potential market downturn," said Dean Barber, CEO of Barber Financial Group in Lenexa, Kansas. This quote in an article from Bankrate.com entitled, Protect Your Nest Egg in a Recession, emphasizes that being proactive rather than reactive is key during a time of decline in economic activity.
To protect money from the volatility of the market, bank based products can be a valuable tool. Many people may want to opt for products with lower-volatility levels and options like guaranteed return and FDIC insurance, compared to equity-based products.
On the college savings side, the products at College Savings Bank are unique in the industry in comparison to equity providers. They offer two different CDs, the CollegeSure CD and the all-new InvestorSure CD, where principal does not decline with the stock market and your money is safe. These products are designed to help offset the rising cost of college and your deposits are FDIC insured to at least $100,000 per depositor. The Bank also offers traditional and Roth IRAs, as well as Coverdell ESAs and state sponsored 529 plans.
State sponsored 529 plans have multiple benefits too:
- 529 plans have Federal Tax benefits. Contributions grow tax-free until the beneficiary is ready to withdraw the funds. When the funds are used to pay for qualified college expenses, principal and earnings are distributed tax-free. There may also be state income tax deductions for those who contribute to 529 savings plans, further compiling reasons to save.
- The maximum contribution limit over a lifetime can be up to $317,000 with a College Savings Bank 529 plan.
- Deposit options are also available. College Savings Bank's 529 plans even have initial contribution amounts as low as $100 a month.
- Distributions can be used for qualified expenses such as tuition, fees, books and eligible room and board costs at accredited educational institutions.
- Transferable: If the child you opened the account for decides not to attend college, you can change the beneficiary, with certain restrictions.
- Everyone is eligible to take advantage of a 529 plan; there are no income limitations or age restrictions. Accounts are easy to open, fund and manage.
We can hope the current slowdown will be a mild and brief recession; but an investment made with College Savings Bank allows your child's future education funds to be safeguarded regardless. It is important to think about your children and the lives you want them to lead. Saving for their education is saving for their future.
To find out more about College Savings Bank, please call a College Savings Bank Adviser at 1-800-888-2723 or visit our web site, www.collegesavings.com.
About College Savings Bank
Founded in 1987, College Savings Bank is a member of the Federal Deposit Insurance Corporation (FDIC), and the first savings bank chartered by New Jersey since 1893. The Bank helps families across the country meet the rising costs of postsecondary education by offering safe and effective financial products. College Savings Bank is the exclusive provider of both the CollegeSure CD and the InvestorSure CD, innovative, unique, saving-for-college investments backed by the full faith and credit of the U.S. Government up to $100,000 per depositor. College Savings Bank is a program manager to the Montana and Arizona qualified tuition programs. For residents of states other than Montana and Arizona, their state may offer state income tax benefits not available through the Montana or Arizona 529 Plans, respectively. College Savings Bank can be reached online at www.collegesavings.com or by calling 800-888-2723.