WARRENVILLE, Ill. – The new 529 college savings plan of the State of Wisconsin can serve as an industry model across the U.S., Members United Corporate FCU, the placement agent, forecast Tuesday.
The plan, for the first time, lets investors use insured-CDs offered by credit unions.
"This is something that we and the Wisconsin Credit Union League have been working on with the State of Wisconsin for more than a year now and we look at this as a credit union breakthrough," declared R. Michael Lee, Midwest region president of Members United.
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Up to now banks have held the lock on such CD investor funds for the 529 tax sheltered vehicles but last month State Treasurer Dawn Marie Sass unveiled offerings for both CUs and banks under its EdVest College Savings Plan. Five Wisconsin CUs, which were not identified, are the first to sign up to accept the CDs at competitive rates.
In Wisconsin, said Lee, EdVest helps consumers save for colleges for their children, offers the tax advantage "and it is something that can be replicated by credit unions in other states.". The state CD plan allows CUs "to build long term relationships" with young families making the investment, he said.
The Wisconsin League noted Monday that Edvest has until now only offered portfolios that invest in underlying mutual funds.
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