At the request of Nebraska State Treasurer Don Stenberg, the addition of an FDIC-insured savings account to the Nebraska Educational Savings Plan Trust was approved today by the Nebraska Investment Council at its meeting at the Embassy Suites Hotel in LaVista. The FDIC insured investment option will become available to investors in the Nebraska College Savings Plan later this calendar year after additional administrative steps have been completed by the program manager.
The Bank Savings Individual Investment Option will be available through the NEST Direct College Savings Plan and the NEST Advisor College Savings Plan. Each option will invest all of its assets in a separate omnibus savings account held at First National Bank of Omaha. Both college savings plans are managed by First National Bank, a subsidiary of First National of Nebraska. The Nebraska Educational Savings Plan Trust, of which the State Treasurer is the Trustee, will be the owner of the omnibus savings accounts.
State Treasurer Stenberg, who opened the presentation to the Nebraska Investment Council, said the new option provides a very conservative, safe investment choice for families wanting to save for their children’s college educations.
Stenberg said he believes the new option will be most attractive to parents whose children are about ready to start college or are already in college and to grandparents who are seeking secure investment opportunities for their grandchildren’s future educational expenses. “This will be a much appreciated option to make sure funds for their children’s or grandchildren’s education are secure and federally insured,” he said.
“I first made this proposal last year during my campaign for Nebraska State Treasurer,” Stenberg said. He said that during his campaign he heard from many parents and grandparents who were seeking secure investment options for college savings. “The Nebraska Investment Council’s approval is a major step in implementation of the option,” he said. FDIC-insured savings accounts already are options in college savings programs in 10 states.
Administrators of NEST (formerly the Nebraska College Savings Plan) expect to announce details of the FDIC insured savings account investment option, including pricing and interest rate, in mid-September. The new products are expected to be available to investors in mid-October.
In materials presented to the Nebraska Investment Council, officials of the Nebraska Educational Savings Plan Trust said the new options would be affordable and easy to understand and the customer experience would be the same as with any other investment option offered through the college savings programs. The materials said the projected customer profile included families seeking stability of principal, low risk, and locked-in earnings. That profile includes conservative investors, grandparents, low- to moderate-income families, and families with children nearing college age.
Contributions to and earnings on the investments in the new options will pass through to each account owner and qualify for FDIC insurance up to the amount set by federal law, which is $250,000.
NEST is a tax-advantaged 529 college savings plan and provides four plans to help make saving for college simple and affordable: NEST Direct College Savings Plan, the NEST Advisor College Savings Plan, the TD Ameritrade 529 College Savings Plan, and the State Farm College Savings Plan. The Nebraska State Treasurer serves as Program Trustee. First National Bank of Omaha serves as Program Manager, and all investments are approved by the Nebraska Investment Council. Families nationwide are saving for college using Nebraska’s 529 College Savings Plans, which have more than 261,000 accounts, including 84,000 in Nebraska. Visit NEST529.com and treasurer.nebraska.gov for more information.
About First National Bank of Omaha
First National Bank of Omaha is a subsidiary of First National of Nebraska. First National of Nebraska and its affiliates have more than $23 billion in assets and 5,000 employee associates. Primary banking offices are located in Nebraska, Colorado, Illinois, Iowa, Kansas, South Dakota and Texas.