Missing Links - comparing college-education tax-deferred state funds - includes information on money market funds, certificates of deposit, bonds and Treasury securities

Kiplinger's Personal Finance Magazine, March, 2000 by Kimberly Lankford

Detecting how COLLEGE SAVINGS portfolios are doing,

I'm setting up a college-education fund for my two children, ages 4 and 1. I've been looking at several tax-deferred state plans but haven't been able to find performance data on them. Where can I get it? -- J.R., New York City

The closest you'll find to a central database is www.savingforcollege.com, which includes quarterly updates on 13 state plans. The site also has links to the state-plan sites--but few of them post returns. To get the specifics, you'll have to contact plan administrators; you won't receive regular performance updates until you open an account.

But even with the stats, it's tough to compare plans because each one is a series of portfolios with a different mix of stocks and bonds depending on the age of your child. When Kiplinger's rated state plans a year ago (see "How to Ace Saving for College," Feb. 1999), we handed out grades based on the investment mix, the ability to use the money at any accredited U.S. school, state-tax benefits and access to out-of-staters.

Top honors (A ) went to Iowa and your state, New York. In 1999 the return on Iowa's four portfolios ranged from about 3% (for students nearing college age) to about 17% (for the youngest). New York's nine portfolios returned from just above 4% to just over 17%.

Top-Yielding Money-Market Mutual Funds

                            RECENT       MIN.
Taxable                  3D-DAY YIELD   INVEST.

1. Strong Investors(*)      5.92%       $1,000
2. Marshall(*)              5.65         1,000
3. Zurich                   5.64         1,000
4. Aon(*)                   5.60        10,000
5. USAA(*)                  5.60         3,000
   NATL AVERAGE             5.05%

                            WEB ADDRESS       TOLL-FREE
Taxable                       (WWW.)            NUMBER

1. Strong Investors(*)   estrong.com         800-368-1030
2. Marshall(*)           marshallfunds.com   800-236-3863
3. Zurich                zurichfunds.com     888-523-4140
4. Aon(*)                aon.com             800-266-3637
5. USAA(*)               -                   800-531-8448

                               TAX. EQ.
                      RECENT     YIELD
                      3D-DAY    28%/31%     MIN.
Tax-free              YIELD     BRACKET    INVEST.

1. Strong             4.05%    5.6%/5.9%   $2,500
2. Vanguard           3.80      5.3/5.5     3,000
3. USAA               3.76      5.2/5.4     3,000
4. Calvert Tax-Free   3.75      5.2/5.4     2,000
5. Zurich             3.63      5.0/5.3     1,000
   NATL AVERAGE       3.34%    4.6%/4.8%

                        WEB ADDRESS       TOLL-FREE
Tax-free                   (WWW.)           NUMBER

1. Strong             estrong.com        800-368-1030
2. Vanguard           vanguard.com       800-635-1511
3. USAA               -                  800-531-8448
4. Calvert Tax-Free   calvertgroup.com   800-368-2748
5. Zurich             zurichfunds.com    888-523-4140

(*) Fund is waiving all or a portion of its expenses.

SOURCE: IBC's Money Fund Report, IBC Financial Data Inc., 290 Eliot St., Box 9104, Ashland, MA 01721; 800-343-5413; www.ibcdata.com

Top-Yielding Certificates of Deposit

                                     RECENT
                                      ANN.     MIN.
6-month                              YIELD    AMOUNT

1. M&T Bank (N.Y.)                   6.38%    $5,000
2. New South Fed savings (Ala.)      6.35      5,000
3. Bank CaroLine (S.C.)([dagger])    6.30        500
4. BankDirect (Tex.)([dagger])       6.30      2,000
5. Arkansas National (Ark.)          6.28     10,000
   NATL AVERAGE                      4.63%

                                     RECENT
                                      ANN.     MIN.
1-year                               YIELD    AMOUNT

1. M&T Bank (N.Y.)                   6.67%    $5,000
2. BankDirect (Tex.)([dagger])       6.60      2,000
3. Savingsbot.com (Nev.)([dagger])   6.60     10,000
4. 1st Source (Ind.)                 6.52        500
5. Greenwood Trust (Del.)            6.52      5,000
   NATL AVERAGE                      5.01%

                                     RECENT
                                      ANN.     MIN.
5-year                               YIELD    AMOUNT

1. Key Bank (N.Y.)                   7.30%    $5,000
2. M&T Bank (N.Y.)                   7.25      5,000
3. Savingsbot.com (Nev.)([dagger])   7.25     10,000
4. Capital One (Va.)                 7.21     10,000
5. Greenwood Trust (Del.)            7.12      5,000
   NATL AVERAGE                      5.54%

                                         WEB ADDRESS
6-month                                    (WWW.)

1. M&T Bank (N.Y.)                   (#)
2. New South Fed savings (Ala.)      newsouthfederal.com
3. Bank CaroLine (S.C.)([dagger])    bankcaroline.com
4. BankDirect (Tex.)([dagger])       bankdirect.com
5. Arkansas National (Ark.)          arknatl.com

                                         WEB ADDRESS
1-year                                     (WWW.)

1. M&T Bank (N.Y.)                   (#)
2. BankDirect (Tex.)([dagger])       bankdirect.com
3. Savingsbot.com (Nev.)([dagger])   savingsbot.com
4. 1st Source (Ind.)                 1stsource.com
5. Greenwood Trust (Del.)            discovercard.com

                                         WEB ADDRESS
5-year                                     (WWW.)

1. Key Bank (N.Y.)                   (#)
2. M&T Bank (N.Y.)                   (#)
3. Savingsbot.com (Nev.)([dagger])   savingsbot.com
4. Capital One (Va.)                 capitalone.com
5. Greenwood Trust (Del.)            discovercard.com

                                      TOLL-FREE
6-month                                 NUMBER

1. M&T Bank (N.Y.)                   800-528-6532
2. New South Fed savings (Ala.)      800-366-3030
3. Bank CaroLine (S.C.)([dagger])    877-692-2765
4. BankDirect (Tex.)([dagger])       877-839-2737
5. Arkansas National (Ark.)          888-226-5262

                                      TOLL-FREE
1-year                                  NUMBER

1. M&T Bank (N.Y.)                   800-528-6532
2. BankDirect (Tex.)([dagger])       877-839-2737
3. Savingsbot.com (Nev.)([dagger])   877-833-4248
4. 1st Source (Ind.)                 888-258-3150
5. Greenwood Trust (Del.)            800-347-7000

                                      TOLL-FREE
5-year                                  NUMBER

1. Key Bank (N.Y.)                   800-872-5553
2. M&T Bank (N.Y.)                   800-528-6532
3. Savingsbot.com (Nev.)([dagger])   877-833-4248
4. Capital One (Va.)                 800-564-7426
5. Greenwood Trust (Del.)            800-347-7000