Helping College Savers
Tax-Free Earnings Growth and Tax-Free Withdrawals
With CollegeBoundfund, you won't face federal income taxes on your earnings while they're in your account. And when you take distributions for qualified education expenses,* they're federal income tax free, too.
In many states—including Rhode Island—your earnings also grow free of state income taxes. With this tax-free treatment of earnings—including capital gains and dividends—your CollegeBoundfund account may grow faster than an identical taxable account.
*Qualified education expenses include tuition, fees, room and board, books and other supplies required for a student to attend an institution of higher education. A 10% penalty or additional tax on earnings withdrawn for non-qualified expenses will apply. Please see the Program Description for more specific information.
Special Gift and Estate-Tax treatment
CollegeBoundfund allows you to take advantage of a special gift-tax exclusion. You can contribute up to $70,000 per beneficiary ($140,000 per beneficiary for married couples) in a single year without paying federal gift taxes. That's true as long as you don't make additional gifts to that beneficiary over a five-year period*.
The contributions you make to your CollegeBoundfund account are also excluded from your taxable estate when it comes time to calculate your federal estate tax liabilities. As with any tax-related matters, you should consult your tax advisor or accountant to determine how your individual tax situation will be affected.
*Under an “add-back” rule, if a contributor to a 529 plan elects to treat the gift as having been made over a five-year period and dies during the five-year period, prorated amounts allocable to the years after death are included in the contributor’s gross estate for federal estate tax valuation purposes.
Easy Way to Invest
CollegeBoundfund's attractive benefits and features make it easy to invest.
Generous Contribution Limits
You—or anyone else—can make CollegeBoundfund contributions until the value of all accounts for that beneficiary reaches $395,000. Of course, the earnings can keep growing beyond this limit. Note that the contribution "ceiling" may change each year to reflect the increasing cost of higher education.
Low Investment Minimums
CollegeBoundfund makes it easy to start saving right away. Open an account with as little as $1,000-and make subsequent investments that can be as small as $50.
The minimum initial contribution for Rhode Island accounts (and certain other accounts subject to the same sales and asset-based charge structure as applies to Rhode Island accounts) is only $250. Please see the Program Description for more information.
There's even better news: for a minimum contribution of only $50 per month per account, you can contribute through an easy, convenient Employee Payroll Direct Deposit Program. For Rhode Island accounts, there's no minimum contribution requirement for participation in an automatic investment plan. Talk to your company's HR department to see if a payroll deduction can be set up for you.
A Simple Way to Make CollegeBoundfund Part of Your Investing Strategy
For more information about the program, including applications and forms, call us at 888.324.5057 Monday−Friday, 8:30 a.m.−7:00 p.m. EST