Compare College Investment Programs
 

College Investment Program

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Savings Bonds
Contribution Limits Annual purchase limit of $30,000 ($60,000 for married co-owners) for Series EE bonds and $30,000 for Series I bonds.
No lifetime limits.
Owner must be at least age 24 at date of issuance.
Account Control Bond owner. Exclusion does not apply if bond is issued in child’s name.
Tax Benefits Tax-deferred growth potential.
Tax-free interest if used for qualified higher education expenses of purchaser, spouse, or dependent.
Income Limitations MAGI limits apply. Eligibility phases out at $65,600 MAGI for single taxpayers ($98,400 MAGI for married taxpayers filing jointly).1
Investment Options N/A.
Qualified U.S. Savings Bonds only. (Series EE or I bonds issued after 1989.)
Ability to Change Beneficiary Yes, but tax advantage applies only if funds are used for tuition and fees for purchaser, spouse, or dependent at accredited higher education schools.
Conditions for Use Can be used for any purpose, but tax advantage applies only if used for tuition and fees for purchaser, spouse, or dependent at accredited higher education schools.
Gift and Estate Planning Benefits N/A for gift tax. Ability to name beneficiary of bond in event of death.
Advantages Minimum return guaranteed by the U.S. government provided the bonds are held to maturity.
Disadvantages Low rate of return.
Does not cover books or room and board.
No tax deduction if MAGI is $80,600 or above ($128,400 if married and filing jointly).

1 Modified Adjusted Gross Income (MAGI) limits listed reflect limits for the 2007 tax year.



 

  
           
   
 
 
   
 


An investor should consider the investment objectives, risks, charges, expenses and tax consequences associated with the Program before investing. All of this information is contained in the Program Disclosure Statement. Please read it carefully before investing. For a copy, call 866.529.ACCT (2228) or visit www.treasury.alabama.gov.

If you or your beneficiary are not Alabama residents, consider whether your home state or the home state of your designated beneficiary offers a Qualified Tuition Program that provides state-tax or other benefits only available through your home state’s Qualified Tuition Program.

The Program is offered by the State of Alabama and is designed to be a Qualified Tuition Program under Section 529 of the Internal Revenue Code. The FDIC, the State of Alabama, the Treasurer of the State of Alabama, the Board of Trustees of the Program Trust Fund or any other federal or state governmental agencies do not insure or guarantee accounts and investments under the Program. Van Kampen Funds, Inc. is the underwriter for the Program. The Program is also offered through independent distributors that have selling agreements with Van Kampen Funds Inc., which serves as an independent distributor for the Program.

Van Kampen and the State of Alabama’s Treasurer’s office do not render tax or legal advice. This material was not intended or written for—and cannot be used by—any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Please consult your tax advisor regarding your individual situation.