Demand for college savings product expected to grow
SAN FRANCISCO, May 15 /PRNewswire-FirstCall/ -- Charles Schwab & Co.,
Inc. is now offering an improved Schwab 529 College Savings Plan, with
reduced fees and lower initial investment minimums aimed at providing
Schwab clients with an even more cost-effective way to begin college
savings for their children and grandchildren. The Schwab 529 College
Savings Plan is sponsored by the State of Kansas, and allows family members
to invest in their children's future education, a top priority for many
investors as college expenses rise.
The Plan's program management fee, which is paid to the Plan's manager,
American Century Investment Management, Inc., has been reduced by nearly
half, from 0.39 percent to 0.20 percent, bringing total Plan fees down to
between 0.78 percent and 1.33 percent, depending on the portfolio choice
selected. Initial investment minimums have also been reduced to from $2,500
to $1,000. The initial minimum is waived for accounts that sign up for
automatic monthly deposits or at least $50. (Initial minimums for Kansas
residents are $250 or automatic deposit of $25.) Contribution limits have
been increased from $235,000 to $290,000.
"The 529 Schwab Plan provides our clients a tremendous opportunity to
get a head start on saving for their children's education," said Rene Kim,
senior vice president, Schwab Investor Services. "With this plan, parents
and grandparents can begin funding a child's education with as little as
$50 a month, with the knowledge that the money will grow tax-deferred and
can be withdrawn without any tax consequences for expenses associated with
higher education."
Strong Growth Continues in Schwab 529 Plan
Assets under management of Schwab's 529 Plan have been growing at a
higher rate than the industry average, according to the Financial Research
Corporation. As of March 31, 2007, assets in the Schwab Plan increased 66
percent over the same period the previous year, more than twice the
industry average of 29 percent. During the 1st quarter of 2007, assets in
the Schwab Plan grew 15.6 percent, compared to an industry average of 6.7
percent. Additionally, at the end of the 1st quarter in 2007, the average
account balance in the Schwab 529 stood at $19, 611, compared to the
industry average of $9,302.
About the Schwab 529 College Saving Plan
The Schwab 529 College Saving Plan is sponsored by the State of Kansas
and available to residents of any state. It features a selection of six
fixed portfolios or four age-based portfolios that differ based on
investment objective, risk tolerance and the beneficiary's age. Ranging
from conservative to aggressive, the portfolios consist of no-load
no-transaction-fee mutual funds from multiple fund companies: American
Century Investments, PIMCO Funds, Schwab Funds(R), Transamerica Corporation
and Laudus Funds(TM), as well as two new fund additions to the plan,
American Beacon Advisors and Baron Funds(R).
A lump sum of up to $60,000 ($120,000 per couple) may be made for each
beneficiary in a single year without incurring gift tax. The plan's
contribution limit is $290,000 per beneficiary. More information is
available at http://www.schwab.com/529.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.8 million client
brokerage accounts, 1,117,000 corporate retirement plan participants,
154,000 banking accounts, and $1.3 trillion in client assets. Through its
operating subsidiaries, the company provides a full range of securities
brokerage, banking, money management and financial advisory services to
individual investors and independent investment advisors. Its broker-dealer
subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org),
and affiliates offer a complete range of investment services and products
including an extensive selection of mutual funds; financial planning and
investment advice; retirement plan and equity compensation plan services;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment
advisors through its Schwab Institutional division. The Charles Schwab
Bank, N.A. (member FDIC) provides banking and mortgage services and
products. CyberTrader(R), Inc. (member SIPC, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com. (0507-4967)
Important Disclosures
As with any investment, it is possible to lose money by investing in
this plan. Before investing, carefully consider the plan's investment
objectives, risks, charges and expenses. This information and more about
the plans can be found in the Schwab 529 Guide and Participation Agreement
(http://www.schwab.com/public/file?cmsid=P-746543&refid=P-1381644&refpid=P-
1033871 ) available from Charles Schwab & Co., Inc., and should be read
carefully before investing. If you are not a Kansas taxpayer, consider
before investing whether your or the beneficiary's home state offers a 529
Plan that provides its taxpayers with state tax and other benefits not
available through this plan.
INVESTORS SHOULD CONSIDER CAREFULLY INFORMATION CONTAINED IN THE
PROSPECTUS, INCLUDING INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES.
YOU CAN REQUEST A PROSPECTUS BY CALLING 800-435-4000. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
The Schwab 529 College Savings Plan is available through Charles Schwab
& Co., Inc., and is managed by American Century Investment Management, Inc.
The Plan was created by the Kansas State Legislature under the provisions
of Section 529 of the Internal Revenue Code and is administered by Kansas
State Treasurer Lynn Jenkins, CPA. Notice: Accounts established under the
Schwab 529 Plan and their earnings are neither insured nor guaranteed by
the State of Kansas, the Kansas State Treasurer, American Century
Investments or Charles Schwab & Co., Inc. Accounts established under the
Schwab 529 Plan are domiciled at American Century Investments and not
Schwab. American Century Investment Services, Inc., Distributor and
Underwriter.
American Century(R) receives remuneration from fund companies,
including PIMCO Funds, American Beacon Advisors, and Baron Funds(R) for
recordkeeping, shareholder services and other administrative services
associated with funds held in the Schwab 529 Plan portfolios.
Charles Schwab & Co., Inc., receives remuneration from fund companies
participating in the Mutual Fund OneSource(R) service for recordkeeping,
shareholder services, and other administrative services.
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Matt Hurwitz of Charles Schwab,
+1-415-636-3700
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