College Savings Plans: Arizona

We here at MomVesting continue our west-to-east overview of all fifty states' 529 plans. We last focused on the West Coast of this great nation, and this week's plan was to look at the entire Southwest. However, Arizona is a fabulous state with some fabulous (and lenghty) 529 perks, so we'll take a detour to look at Arizona on it's own today and continue our journey to the other states in a few weeks. So here's the lowdown on Arizona.

Arizona College Savings Plans

The home of NFL's Cardinals has three plans to choose from: the Arizona Family College Savings Program – CollegeSure 529 Plan; the Fidelity Arizona College Savings Plan; and the InvestEd Plan.

The Similarities

The three do have some similarities: none have a residency requirement and all three have a maximum contribution of $350,000 per beneficiary. Also, through the year 2012, all three plans offer some tax benefits: contribtuions to these (and also to non-Arizona plans) of up to $750 individually and $1,500 for those married-filing-jointly are deductible.

The Differences

Beyond these similarities, the plans differ a bit. InvestEd is an adviser-sold (or broker-sold) plan, while the CollegeSure 529 and the Fidelity Arizona are both direct sold. Further along the differences spectrum, each plan offers the following:

Arizona Family College Savings Program - CollegeSure

• Three FDIC insured CD options: a CollegeSure CD (variable interest rate based on a private college tuition index), an InvestorSure CD (variable interest rate based on five-year performance of S&P 500), and fixed-rate CDs with one and three year maturities.
• No age-based options.
• Lump-sum initial contribution minimum of $250 for any of the CD options.
• Automatic contribution of $25 per month deducted via payroll or from checking account for any of the CD options.
• Deposits into any CD option that comes in under $250 are held in an interest-bearing savings account until the $250 is reached; at that time, a CD is purchased on the next CD issue date.
• There are no fees (management, maintenance, or enrollment) associated with this plan.

Fidelity Arizona College Savings Plan

• Two age-based options.
• Static investment options include five multi-fund portfolios, six individual fund portfolios and one Bank Deposit porfolio.
• Lump-sum minimum contributions include an intial contribution of $50 and $25 for each contribution after that.
• Automatic contributions have a minimum of $15 montly or $45 quarterly.
• No enrollment or application fees; there are various program management fees.

InvestEd Plan

• Three age-based options: a Growth portfolio, a Balanced portfolio and a Conservative portfolio.
• Static investment options include the three portfolios named above as fund-of-fund options as well as seventeen individual options.
• Lump-sum minimum contribution is initially $500.
• Automatic minimum contribution is $50 per portfolio per month via bank transfer or $25 by payroll deduction per pay period.
• There are no enrollment or application fees, but note that contributions could be subjected to sales charges. Plus there is a $20 maintenance fee for accounts under $25,000 for non-Arizona residents.

There you have it: Arizona's college savings plans in a nutshell. Join us in a few weeks for our next post about the rest of the Southwest: Texas and New Mexico.

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