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- Investment Policy Statement
The fund seeks income consistent with the preservation of principal and invests all of its assets in a FDIC-insured interest-bearing deposit account held at Union Bank and Trust Company and/or Nelnet Bank.
Interest rate risk that the interest earned on the Bank Savings 529 Portfolio will not be as remunerative as other available investments; Credit risk to the extent that an investment exceeds the limit provided by FDIC insurance; Investment risk; and Regulatory Risk.
The FDIC-insured Deposit Account invests solely in a Union Bank and Trust Company and/or Nelnet Bank omnibus deposit account. It seeks income consistent with preservation of principal. The FDIC-insured Deposit Account is an omnibus savings account pursuant to a fiduciary, custodial and/or agency relationship on behalf of the 529 Plan participants and is insured by the FDIC in the manner and up to the limits described below.
Investments in the FDIC-insured Deposit Account will earn varying rates of interest. The interest rate generally will be equivalent to short-term deposit rates. Interest on the deposit account will be compounded daily based on the actual number of days in a year (typically 365 days, except for 366 days in leap years) and will be credited to the deposit account on a monthly basis. The interest on the savings account is expressed as an annual percentage yield (“APY”). The APY on the deposit account will be reviewed on a periodic basis and may be recalculated as needed at any time. The minimum interest rate is 0.53% as of the date of April 1, 2022. To see the current Bank Savings 529 Portfolio APY please go to BrightStart.com or call 866.722.7283.
FDIC Insurance Coverage
Subject to the application of bank and FDIC rules and regulations to each account owner, contributions and earnings in the FDIC-insured Deposit Account will be subject to FDIC insurance. By contrast, no other Underlying Investment is insured by the FDIC (or by any other government agency or branch). Contributions to and earnings on the investments in the FDIC-insured Deposit Account have been structured in order to be insured by the FDIC on a per participant, pass-through basis with respect to each account owner up to the maximum limit established by federal law, which currently is $250,000. The amount of FDIC insurance provided to an Account Owner is based on the total of: (1) the value of an Account Owner’s investment in the FDIC-insured Deposit Account Underlying Investment, and (2) the value of all other accounts held by the Account Owner at Union Bank and Trust Company and/or Nelnet Bank (including bank deposits), as determined in accordance with applicable FDIC rules and regulations. You are responsible for monitoring the total amount of your assets on deposit at Union Bank and Trust Company and/or Nelnet Bank, including amounts held directly at Union Bank and Trust Company and/or Nelnet Bank. All such deposits held in the same ownership capacity at Union Bank and Trust Company and/or Nelnet Bank are subject to aggregation and to the current FDIC insurance coverage limitation of $250,000. Each Account Owner should determine whether the amount of FDIC insurance available to the Account Owner is sufficient to cover the total of the Account Owner’s investment in the FDIC-insured Deposit Account Underlying Investment plus the Account Owner’s other deposits at Union Bank and Trust Company and/or Nelnet Bank. Deposits held in different ownership capacities, as provided in FDIC rules, are insured separately. None of the Bright Directions Advisor-Guided College Savings Program, the Program Manager, the State of Illinois, the Illinois State Treasurer, or any of their respective affiliates are responsible for determining the amount of FDIC insurance provided to an Account Owner. For more information, please visit www.fdic.gov.
The FDIC-insured Deposit Account Underlying Investment does not provide a guarantee of any level of performance or return or offer any additional guarantees. Like all Portfolios, neither the contributions into the FDIC-insured Deposit Account Underlying Investment, nor any investment return earned on the contributions are guaranteed by the State of Illinois, the Illinois State Treasurer, the Program Manager, Union Bank and Trust Company and/or Nelnet Bank or any of their respective authorized agents or affiliates or any other federal or state entity or person.
The following is a summary of investment risks associated with the FDIC-insured Deposit Account.
FDIC Insurance Risk:
Although your interest in the assets of the FDIC-insured Deposit Account on deposit at Union Bank and Trust Company and/or Nelnet Bank, together with any other deposits you may have at Union Bank and Trust Company and/or Nelnet Bank, are eligible for FDIC insurance, subject to applicable federal deposit insurance limits, the units of the Portfolios (including the Bank Savings 529 Portfolio), themselves are not insured or guaranteed by the FDIC or any other government agency or branch. You are responsible for monitoring the total amount of your assets on deposit (including amounts in other accounts held in the same right and legal capacity) in order to determine the extent of FDIC deposit insurance coverage available to you on those deposits, including your Bank Savings 529 Portfolio deposits.
Interest Rate Risk:
The interest rate paid by Union Bank and Trust Company and/or Nelnet Bank is based on a number of factors, including general economic and business conditions. The rate of interest will vary over time and can change daily without notice to you. The interest rate paid on the FDIC-insured Deposit Account and Bank Savings 529 Portfolio may not be sufficient to meet your investment objectives and may be more or less than the investment returns available in other Individual Fund Portfolios.
You own units of the Portfolio. You do not have an ownership interest or any other rights as an owner or shareholder of the FDIC-insured Deposit Account Underlying Investment in which the Bank Savings 529 Portfolio invests. You cannot access or withdraw your money from the Bank Savings 529 Portfolio by contacting Union Bank and Trust Company and/or Nelnet Bank directly. You must contact the Program Manager to perform any such transactions in your Account. The assets in the FDIC-insured Deposit Account Underlying Investment on deposit at Union Bank and Trust Company and/or Nelnet Bank are subject to legal process such as a levy or garnishment delivered to the Program Manager to the same extent as if those assets were invested in any other investment option.
The status of the FDIC regulations applicable to 529 college savings plans are subject to change at any time. It is not possible to predict the impact any such change in the regulations would have on the FDIC-insured Deposit Account Underlying Investment or Bank Savings 529 Portfolio.
Total Annual Asset-Based Fee*0.07%
*Includes the program management fee and the estimated underlying fund expenses based on the most recent fund prospectuses dated prior to September 29, 2023.
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