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Fifth Third Bank, an investment option partner with Ohio’s 529 Plan, has increased the rates on five terms of 529 Certificates of Deposit (CDs) as of Thursday, April 12, 2018. Fifth Third Bank is a member of the FDIC.
The rate for the 6-11 Month 529 CD will be raised from 1.00% Annual Percentage Yield (APY) to 1.50%, an increase of 0.50%. The interest rate for 12-23 Month 529 CD will increase from 1.25% APY to 1.70% APY, an increase of 0.45%. For the 24-35 Month 529 CD, the rate will increase from 1.55% APY to 2.00% APY, an increase of 0.45%. The APY for the 36-47 Month CD will rise from 1.65% to 2.00% for an increase of 0.35%. The increased rate for the 48-59 Month CD is now 2.00%, up from 1.75% for an increase of 0.25%.
This is the fourth time in less than a year that Fifth Third has increased the 529 CD rates; the other times were in January 2018, October 2017, and August 2017.
If your student is starting their higher education soon and you want to be more conservative in your 529 saving plan, you have options. The minimum contribution to add a CD to your 529 investments is $500. Current CollegeAdvantage Direct 529 Plan account owners can purchase a CD online. Log in in to your Direct Plan account and make a one-time electronic contribution from your bank account to buy a CD. After logging in, you can also go to “Change Your Investment Options” section to exchange a current investment with a $500 minimum to buy a CD. You can also download an Additional Contribution Form and mail it with a check to purchase a CD.
Once the CD reaches maturity, the balance will transfer to a Fifth Third 529 Savings Account. At this point, you can withdraw the funds, exchange the funds to another Fifth Third 529 CD, or to other CollegeAdvantage investment options, or leave the money in the savings account to earn interest. Please remember that federal regulations for qualified 529 programs limit the number of times account owners can reallocate investment options for the same beneficiary. The 529 account owner is allowed to make two exchanges of assets from one investment option to another per calendar year, per beneficiary. Please refer to the CollegeAdvantage Direct Plan Offering Statement and Participation Agreement for additional details.
If the 529 CD is liquidated prior to its date of maturity, there are penalties assessed. Both the Fifth Third 529 Savings Account and the Fifth Third 529 CDs are FDIC-insured investment options.
Go here to purchase a CD with these higher interest rates and start saving for your child’s future higher education expenses today! If you haven’t opened a CollegeAdvantage Direct 529 Plan, it’s easy to enroll online and purchase a Fifth Third 529 CD at that time. Ohio’s 529 Plan, CollegeAdvantage, has tools to help you determine how much to save for future college costs as well as to see the cost of waiting to save. Remember, it’s far cheaper to save for college now and earn interest in an 529 account than pay off students loans with accumulated interest later. CollegeAdvantage is your plan, your way.
Posted on April 13, 2018