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College Savings Bank


The CollegeSure CD is an FDIC-insured certificate of deposit that is indexed to college costs. It is offered by College Savings Bank. The CollegeSure CD pays interest just like any other certificate of deposit, but is guaranteed to yield a fixed percentage of average college costs at maturity. Once a CollegeSure CD has matured, the family can use the principal and accumulated interest at any school. Students are not restricted in their choice of school.

The inflation rate for college costs is based on the College Board's Independent College 500 Index (IC 500). This index measures the enrollment-weighted average of costs (tuition, fees, room and board) at 500 independent four-year institutions that provide housing for at least 15% of their students. The interest rate earned on the CollegeSure CD is equal to the IC 500 index less a margin of no more than 3%. The interest rate on the CollegeSure CD is guaranteed to always be at least 2%, even if college costs increase at a lower rate.

The minimum investment is $1,000. Once the account is opened, additional investments can be made in increments of $250 or more. Deposits of $10,000 or more earn an interest rate that is 0.5% higher.

The investment is measured in units or fractions of units, with one unit being equal to a year of tuition, fees, room and board at the average private college. The college costs at individual schools are likewise measured in terms of units, with a year at the average in-state public college running 0.40 units and a year at an Ivy League school running about 1.42 units. Families can purchase the number of units they think they'll need for their child's likely choice of college. A unit is guaranteed to pay one full year of average college costs at maturity, regardless of the increase in college costs.

Because the interest paid on the CD is less than the college cost inflation rate, units are sold at a rate slightly above the current index value for one year of college. The purchase price of one unit is calculated so that the projected value at maturity will equal one unit. For a 10-year maturity and 7% projected college cost inflation, the purchase price will be approximately 15% greater than the current index values. There are no sales charges.

College Savings Bank manages the section 529 college savings plans for Montana and Arizona.

College Savings Bank has more than 10,000 depositors and more than $250 million in assets. College Savings Bank invests its assets in high-grade adjustable-rate mortgage-backed securities.

College Savings Bank was acquired by Pacific Life on July 31, 2002.

For more information, please contact:
College Savings Bank
5 Vaughn Drive
Princeton, NJ 08540
Phone: 1-800-888-2723


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