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Now that we’re fresh from Memorial Day barbecues and family outings, it’s time for another great American holiday—National 529 College Savings Day! What better way to start off the summer than with a day that celebrates the potential and bright futures of our next generation?
Established by the Internal Revenue Code 529 in 1996, 529 plans are the tax-advantaged way to save for college through tax-free earnings and tax-free withdrawals for qualified higher education expenses. At Fifth Third Bank, we’re big fans of 529 plans, and there are a countless reasons why. However, in honor of today—and to take it easy on our summer-vacation brains—we’ll focus on just five.
Our five favorite reasons to celebrate 529 Day:
1. It’s never too early—or too late—to start saving for college.
Whether college is right around the corner for your child or in 18 years, saving for college now can help cover tuition costs, and reduce the need for student loan debt, later on. In fact, by planning ahead for future college expenses, a 529 account can grow through the power of compound interest.
2. 529 plans are flexible.
Want to change beneficiaries? (In case your oldest decides to skip college for Hollywood.). No problem. Transfer funds from one 529 plan to another? Can do. Plus, you can use your 529 money at any eligible institution, regardless of what state plan you choose.
3. Anyone can contribute!
Moms, dads, grandparents, next-door neighbors—anyone who wants to help support your children’s higher education goals—can establish or contribute to their 529 savings plan.
4. Ohioans who save in Ohio’s 529 Plan, CollegeAdvantage, can deduct 529 contributions up to $4,000 from their Ohio taxable income, per beneficiary, per year.
Contributions over $4,000 per beneficiary, per year, may be carried forward to deduct from future tax years until all of your contributions are fully deducted.
5. You can earn 2.25% APY1 on Fifth Third’s 529 CD.
Make your money work harder—and smarter—toward saving for college. In honor of 529 Day, we’re offering a limited-time special on a 6- to 11-month CD, available through Ohio’s CollegeAdvantage 529.2 Earn a great rate and enjoy flexible terms, as your money grows tax-free3 in an FDIC-insured4 investment.
You can get started with as little as $500. Here’s how:
1. Open a CollegeAdvantage Direct 529 Savings Plan.
2. Purchase the 2.25% APY Fifth Third 529 CD.
3. Once your CD matures, the balance will automatically transfer to a Fifth Third 529 savings account.
Summer is great, but it won’t last forever, and neither will our 529 CD special. Act now to get a great rate before our offer ends on June 30, 2019.
The savings that you put away toward your child’s 529 plan today can make an impact that will last a lifetime.
1. The interest rate will remain the same until the maturity date of the CD. The annual percentage yield assumes interest remains on deposit until maturity. A withdrawal of interest will reduce earnings. Interest begins to accrue on the business day of deposit. Interest will be calculated using the daily balance method. This method applies a periodic rate to the balance in the account each day.
2. The CollegeAdvantage Direct 529 Savings Plan is offered and administered by the Ohio Tuition Trust Authority. CollegeAdvantage is described in the current Offering Statement and Participation Agreement, which includes investment objectives, risks, costs, and other important information; read and consider it carefully before opening an account. Participation in the Fifth Third Bank options does not guarantee that contributions plus earnings will be adequate to cover future college expenses; contributions and earnings are not guaranteed by the state of Ohio or the Ohio Tuition Trust Authority. For a current copy of the Offering Statement, go online at www.CollegeAdvantage.com, call 1-800-AFFORD-IT (233-6734), or ask a Fifth Third Bank representative.
3. Earnings on withdrawals not used for qualified higher education expenses may be subject to federal income tax and a 10% federal tax penalty.
4. FDIC Deposit Insurance. Deposit balances are insured up to the maximum amount permitted by law. The standard insurance amount is $250,000 per depositor, for each deposit insurance ownership category. Please visit www.fdic.gov for more information about FDIC insurance coverage.
Fifth Third Bank does not provide tax advice; consult your tax advisor.
Posted on June 5, 2019