Personal BankingSavings Accounts 529 Plans

According to the College Board, a first-grader today
will need about $80,000 to attend a public, in-state
university and more than double that for a private
university. How will you save for your child's
education?

Consider a 529 Plan offered through Chevy Chase Financial Services, a subsidiary of Chevy Chase Bank. It's flexible and affordable, and you'll take advantage of significant tax breaks while saving for your child's future*. 529 Plans feature:

  • Federal income tax-free qualified withdrawals*
    Grow your investment tax-free as long as they are used for qualified expenses like tuition, room, board, books, supplies and fees.
  • Estate tax benefits*
    Your contribution is excluded from your federal taxable estate, reducing your taxable value.
  • Gift tax benefits*
    Accelerate up to five years worth of annual exclusion gifts by contributing up to $55,000 for singles or $110,000 for married couples - per beneficiary in a single year without paying federal gift tax.
  • Choice of schools
    Proceeds accepted nationwide by any accredited college, university, vocational or technical school that is eligible to participate in federal financial aid programs administered by the U.S. Department of Education.

    It's never too late to begin saving. So whether you are a new parent, grandparent, or planning to attend school yourself, 529 Plans can help you spend more of your money on education, not on taxes.

    For more information view a list of Frequently Asked Questions now, or to open a 529 Plan, call Chevy Chase Financial Services at 1-800-451-9963, or complete our contact form now.

    *This information is not meant to be a tax guide. If you have specific questions or need tax advice, you should consult a tax advisor. Tax legislation exempting earnings on qualified withdrawals from federal income tax expires on 12/31/10.

    Chevy Chase Financial Service Corporation, a subsidiary of Chevy Chase Bank, owns Chevy Chase Securities Inc., a registered securities broker/dealer and a member of the NASD and SIPC, and Chevy Chase Insurance Agency, Inc., a licensed insurance agency. All non-deposit investment products are provided to bank customers by one of these two companies. These products are not FDIC-insured, are not obligations of or guaranteed by Chevy Chase Bank or any bank and involve investment risks, including possible loss of the principal amount invested.

    Not FDIC-Insured
    May lose value
    No bank guarantee

    Frequently Asked Questions

    For whom can I open an account?
    Am I eligible to contribute?
    When's the deadline for contributions?
    Up to what age may I make contributions?
    When can I begin withdrawing my contributions?
    How are my withdrawals taxed?
    What are my conversion options?

    For whom can I open an account?
    An account may be opened for any one you choose to help prepare for college expenses, including any child, grandchild, niece/nephew, non-relative or even yourself. And, there are no age limits on beneficiaries.

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    Am I eligible to contribute?
    Anyone may contribute; no income limits apply.

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    When's the deadline for contributions?
    If you haven’t yet opened a 529 Plan, now is the time, before the December 31 annual contribution deadline for each year.

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    Up to what age may I make contributions?
    You may be any age to make contributions.

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    When can I begin withdrawing my contributions?
    529 Plan distributions can be taken for any qualifying post-secondary education expense, including tuition, fees, books, supplies, equipment, room and board (with certain restrictions) and special-needs services.

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    How are my withdrawals taxed?*
    As long as the distributions are used for qualifying education expenses, and as long as the distributions are not in excess of amounts spent on education expenses, as of 2002, the withdrawals are free from federal taxation. State tax varies. Withdrawals for non-qualified use are taxed as ordinary income and may be subject to a 10% penalty.

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    What are my conversion options?
    Assets in a 529 Plan may be transferred to another 529 Plan for the same designated beneficiary or to a member of the designated beneficiary's family no more than once annually.

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