Bank Savings 529 Portfolio – invests solely in a Union Bank & Trust Company omnibus savings account.
The Bank Savings 529 Portfolio seeks income consistent with the preservation of principal and invests all of its assets in a savings account held at Union Bank & Trust Company (the “Bank”). The savings account is an omnibus savings account insured by the FDIC in the manner and up to the limits described below and is held in trust by the Alabama College Savings Program Trust at the Bank. The Bank also serves as Program Manager of the Plan. Investments in the Bank Savings 529 Portfolio will earn varying rates of interest. The interest rate generally will be equivalent to short-term deposit rates. Interest on the Savings Account will be credited to the Savings Account on monthly basis. The interest on the Savings Account is expressed as an annual percentage yield (“APY”). The APY on the Savings Account will be reviewed by the Bank on a monthly basis and may be recalculated as needed at any time. To see the current Bank Savings Static Investment Option APY please go to www.CollegeCounts529advisor.com or call 866.529.2228.
FDIC Insurance Coverage
Subject to the application of bank and FDIC rules and regulations to each account owner, funds in the Bank Savings 529 Portfolio will retain their value as a result of the FDIC insurance. By contrast, no other Investment Option of the Plan is insured by the FDIC (or by any other government agency or branch). Contributions to and earnings on the investments in the Bank Savings 529 Portfolio are insured by the FDIC on a per participant, pass-through basis to each account owner up to the maximum limit established by federal law, which currently is $250,000. The amount of FDIC insurance provided to an Account Owner is based on the total of: (1) the value of an Account Owner’s investment in the Bank Savings 529 Portfolio, and (2) the value of all other accounts held by the Account Owner at the Bank (including bank deposits), as determined in accordance with applicable FDIC rules and regulations. You are responsible for monitoring the total amount of your assets on deposit at the Bank, including amounts held directly at the Bank. All such deposits held in the same ownership capacity at the Bank are subject to aggregation and to the current FDIC insurance coverage limitation of $250,000. Each Account Owner should determine whether the amount of FDIC insurance available to the Account Owner is sufficient to cover the total of the Account Owner’s investment in the Bank Savings 529 Portfolio plus the Account Owner’s other deposits at the Bank. Deposits held in different ownership capacities, as provided in FDIC rules, are insured separately. None of the CollegeCounts 529 Fund, the Program Manager, the State of Alabama, the CollegeCounts Board, the State Treasurer of Alabama, or any of their respective affiliates are responsible for determining the amount of FDIC insurance provided to an Account Owner. For more information, please visit www.fdic.gov.
The Bank Savings 529 Portfolio does not provide a guarantee of any level of performance or return or offer any additional guarantees. Like all of the Investment Options, neither the contributions into the Bank Savings 529 Portfolio nor any investment return earned on the contributions are guaranteed by the State of Alabama, the CollegeCounts Board, the State Treasurer of Alabama, the Program Manager, the Bank or its authorized agents or their affiliates or any other federal or state entity or person.
The following is a summary of investment risks associated with the Bank Savings 529 Portfolio.
FDIC Insurance Risk: Although your interest in the assets of the Bank Savings 529 Portfolio on deposit at the Bank, together with any other deposits you may have at Union Bank & Trust Company, are eligible for FDIC insurance, subject to applicable federal deposit insurance limits, the units of the Bank Savings 529 Portfolio themselves are not insured or guaranteed by the FDIC or any other government agency or branch. You are responsible for monitoring the total amount of your assets on deposit at Bank Savings 529 Portfolio (including amounts in other accounts at Bank Savings 529 Portfolio held in the same right and legal capacity) in order to determine the extent of deposit insurance coverage available to you on those deposits, including your Bank Savings 529 Portfolio deposits.
Interest Rate Risk: The interest rate paid by the Bank is based on a number of factors, including general economic and business conditions. The rate of interest will vary over time and can change daily without notice to you. The interest rate paid on the Bank Savings 529 Portfolio may not be sufficient to meet your investment objectives and may be more or less than the investment returns available in other Individual Fund Portfolios.
Ownership Risk: You own units of the Bank Savings 529 Portfolio. You do not have an ownership interest or any other rights as an owner or shareholder of the underlying deposit account in which the Bank Savings 529 Portfolio invests. You cannot access or withdraw your money from the Bank Savings 529 Portfolio invests by contacting the Bank directly. You must contact the Program Manager to perform any transactions in your Account. The assets in the Bank Savings 529 Portfolio on deposit at the Bank are subject to legal process such as a levy or garnishment delivered to the Program Manager to the same extent as if those assets were invested in any other investment options.
Regulatory Risk: The status of the FDIC regulations applicable to 529 college savings plans are subject to change at any time. It is not possible to predict the impact any such change in the regulations would have on the Bank Savings 529 Portfolio.