Upromise Savings Accounts
 

Upromise Savings Accounts
By: Karen Rinehart, CFP®
 The Henssler Financial Group Position Paper

The Hensler Financial Group Wealth Management

Upromise Savings Accounts are a way to save for college by spending money. Every time you purchase an eligible good or service with a Upromise company, a portion of the purchase price will be contributed to your Upromise account. These accounts are non-interest bearing accounts; therefore, in order to maximize the benefit of one of these accounts, it should be linked with a 529 Plan. If you link an account with a 529 Plan, Upromise will periodically sweep the assets from your Upromise account to the 529 Plans. There are several 529 Plan accounts that can be established and linked to your Upromise savings account. They are as follows:

  • Arkansas: The GIFT College Investing Plan
  • Colorado: CollegeInvest Direct Portfolio College Savings Plan
  • Hawaii: HI 529 -Hawaii's College Savings Program
  • Idaho: IDeal - Idaho College Savings Program
  • Indiana: CollegeChoice 529 Direct Savings Plan
  • Iowa: College Savings Iowa™ 529 Plan
  • Missouri: MOST - Missouri's 529 College Savings Plan
  • Nevada: Upromise College Fund 529 Plan
  • New York: New York's 529 College Savings Program Direct Plan
  • North Dakota: College SAVE
  • Pennsylvania: NowU – PA 529 Guaranteed Savings Plan

Note: Residents of any state can invest in another state's plan in most circumstances. Consult with a tax adviser regarding the state consequences of any investment in a 529 plan.

Assets in your Upromise account are held by Upromise Investments. Upromise Investments is a registered broker-dealer with the SEC and a member of the NASD. They are a member of the Securities Investor Protection Corporation (SIPC), which insures the securities of customers, up to $500,000.

Savings can be made to a Upromise account for any future college student. A future college student can be anyone who is a U.S. citizen that wants a higher education. Basically, it can be anyone whose higher education expenses you wish to pay. Students can be added at any time. The account holder has ultimate control over the account and the student does not have access to the account.

The first step in taking advantage of the Upromise program is to enroll. Go to www.upromise.com to join for free.

There are several ways to save to your Upromise account:

With Your Credit Cards
Register your credit cards on the website and every time you use your credit cards at a company that participates in Upromise, a portion of the purchase price will be deposited into your account.

Citibank Upromise Credit Card
You can apply for a Citibank Upromise credit card that offers 1% back every time you use the card so when you use the Citibank card, you get 1% from Citibank—on top of the other company's contribution.

Company Programs
Sign up with the company and the company will deposit savings into your account. AT&T and Citibank only require that you sign up once and McDonald's requires that you provide additional information to track contributions. Upromise contributing companies will contribute a percentage of your spending to savings.

Shop Online through Upromise
You will receive automatic contributions whenever you shop online at more than 100 sites. You will need to link to these sites through the Upromise website.

With Your Grocery Card or Loyalty Cards
Register your grocery card or CVS ExtraCare Card and you will get money for college when you buy brands such as Coca-Cola, Kellogg's, Keebler, Tide, Huggies, Glad, and many more.

Family and friends can also register with Upromise and direct contributions to your account for higher education expenses.

You only need one Upromise account even if you are saving for several students. You can specify the percentage that you want contributed to go to each student. This is called allocating the assets. You can let assets accumulate in the account, unallocated, and allocate them at a later date. Allocations can be changed at any time. If you remove a student from the Upromise account, any remaining contributions in your account previously allocated to the student removed become unallocated and remain in the account.

Money can stay in the Upromise account for as long as you want. If your child decides to take time off and then attends graduate school, you can continue to make contributions to the account.

If your child decides not to attend college then you have three options. You can:

  • Assign remaining contributions and future contributions to another student.
  • Withdraw remaining company contributions. Contributions earned are considered to be cash rebates and rewards from companies. Therefore, contributions withdrawn are not considered taxable income to the account owner.
  • Donate remaining contributions to the Upromise Education Foundation.

If the student decides to go to a trade school, the company contributions can be transferred to a 529 Plan and qualify for higher education expenses.

You can begin saving to a Upromise account even if you do not have children, and can even use it to save for your own higher education. For more information regarding this topic, please contact The Henssler Financial Group at 770-429-9166 or comments@henssler.com.

All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.
 
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