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Fifth Third 529 CDs Rates Increase

If you’d prefer to be more conservative with your college savings, especially if your child is getting close to college, you have options with Ohio’s 529 Plan, CollegeAdvantage.

Fifth Third Bank, an investment partner of Ohio’s 529 Plan, is encouraging people to save for their children’s future college costs by increasing the rates of eight terms of 529 Certificates of Deposit (CDs). The new CD rates are effective as of Friday, June 15, 2018. Fifth Third is a member of the Federal Deposit Insurance Corporation (FDIC).
cd-apys-as-of-06-15-2018-chart

The rate for the 3-5 Month 529 CD is now 1.00% Annual Percentage Yield (APY), up from 0.25%. The interest rate for 12-23 Month 529 CD increased from 1.70% APY to 2.00% APY. The rate for the 24-35 Month 529 CD, 36-47 Month CD, 48-59 Month CD, 60-83 Month CD, 84-119 Month CD, and 120-144 Month CD, is now set at 2.50% APY, up from to 2.00% APY.

This is the fifth time in less than a year that Fifth Third has increased the 529 CD rates. Previous increases occurred in April 2018January 2018October 2017, and August 2017.

The minimum contribution is $500 for a CD. You cannot purchase a CD with payroll deduction or automatic recurring contributions.

Current CollegeAdvantage Direct 529 Plan account owners can purchase a CD online. Log in to your Direct Plan account and make a one-time electronic contribution of $500 or more 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. When selecting to purchase a CD, choose what the term of maturity would best fit your family’s needs.

Two business days are required to complete the transaction to open a Fifth Third 529 CD. Accordingly, it will receive the APY in effect on the business day following the receipt of a contribution, which is received in good order before 4 p.m. on any given business day.

Once the CD reaches the end of its term, the balance will automatically transfer to a Fifth Third 529 Savings Account. At this point, you can make a withdrawal, or exchange the funds to another Fifth Third 529 CD or other ​Ohio's 529 Plan investment options. You can also opt to leave the money in the savings account to earn interest. If the 529 CD is liquidated prior to its date of maturity, penalties will be assessed.

Federal regulations for qualified 529 programs limit the number of times account owners can reallocate investment options for the same beneficiary. Currently, the limit is two exchanges of assets per calendar year, per beneficiary. Please refer to the CollegeAdvantage Direct Plan Offering Statement and Participation Agreement for additional details.

Both the Fifth Third 529 Savings Account and the Fifth Third 529 CDs are FDIC-insured investment options to certain limits.

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 age-based savings strategies. 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. Ohio’s 529 Plan, CollegeAdvantage is your plan, your way.

Posted on June 18, 2018

Ohio Tuition Trust Authority

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