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States Hope CDs Will Boost Confidence in 529 Plans Ohio, Virginia, Wisconsin, and Missouri are among the states that have added federally-insured certificates of deposit (CDs) to the portfolio options of their college-savings plans, the Wall Street Journal's College Journal reports. State governments hope that the move will attract more conservative investors to 529 savings plans. The Federal Deposit Insurance Corporation agreed last year to insure individual 529 CD accounts up to $100,000. The FDIC guarantee, combined with the federal and state tax benefits extended to 529 accounts, are making these increasingly attractive college savings instruments. Ohio instituted its 529 CD program after market research showed that a growing number of consumers wanted them as an investment option. College Journal says that there are currently about 3,000 investors holding 529 CDs, with total deposits exceeding $16 million. The CDs are available for periods ranging from 3 to 12 months and currently offer rates above 5 per cent.
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