Cape & Coast Bank Appoints Marc Petrocchi as Branch Manager – Small Business Specialist

capeandcoastbk on December 31, 2024

Marc Petrocchi headshotCape & Coast Bank has announced the appointment of Marc Petrocchi to the position of Assistant Vice President, Branch Manager – Small Business Specialist, overseeing operations at the West Barnstable branch.

“Marc is a powerful addition to our team,” said Lisa Oliver, Chair, President, and CEO of Cape & Coast Bank. “His proven leadership, combined with his passion for supporting small businesses, makes him uniquely qualified to fulfill Cape & Coast Bank’s mission of providing the best financial solutions for the Cape Cod community.”

With a strong history of championing small businesses, Marc will focus on developing tailored financial strategies that address the unique challenges faced by local entrepreneurs. His extensive experience in branch leadership, small business lending, and community engagement positions him perfectly to support the dynamic needs of Cape Cod’s business community.

Marc joins Cape & Coast Bank from Truist Bank, a national financial institution where he served as Branch Leader, managing compliance, operations, and client satisfaction. Previously, he held leadership roles at Berkshire Bank, TD Bank, and Citizens Bank in Massachusetts, with noted achievements in operational excellence and community engagement. He holds a bachelor’s degree in psychology from Stanford University  and a Master of Business Administration from Boston University.

“Moving from a national bank structure to a community-based institution focused on client needs is a welcome transition,” said Marc. “I look forward to drawing on my experience to help Cape & Coast Bank further its reputation as Cape Cod’s true community bank by offering  service and solutions that drive the success of local businesses.”

Beware of Holiday Scams

capeandcoastbk on December 18, 2024

If you receive an unexpected call, email, or text that claims to be from Cape & Coast Bank and requests a password, login, security or verification code, please do not share this information.  Please contact our Customer Assistance Center, located at Hyannis, at 508-568-3400 with any questions.

As the holiday season kicks into high gear, unfortunately so do scams.

This time of the year we see an increase in debit/credit card fraud and social engineering scams. Social engineering is the use of deception to manipulate individuals into sending money, or divulging personal information that may be used for fraud.

  • Cyber criminals can change their caller ID phone number to make their phone call look like it’s from your local area code or from a trusted name. Caller ID cannot be relied upon these days.
  • Unless you placed the call, never give the other party information that they should already have. For example, if the bank called you, they shouldn’t be asking for your account number.
  • If you believe a phone call is an attack, simply hang up. If you want to confirm that the phone call was legitimate, go to the organization’s website (such as your bank) and call the customer support phone number directly yourself. That way, you really know you are talking to the real organization.
  • Anytime anyone calls you and creates a tremendous sense of urgency or pressure, be extremely suspicious.

Popular Scams

Scammers are usually after your money or personal information. They trick unsuspecting individuals into sending money or divulging personal information by creating situations that feel very urgent and realistic.

Imposter Scams

A scammer pretends to be someone you trust — a government agency like the Social Security Administration or the IRS, a family member, a love interest, or someone claiming there’s a problem with your computer. The scammer can even have a fake name or number show up on your caller ID to convince you.

Scammers use caller ID spoofing
Scammers can make any name or number show up on your caller ID. That’s called spoofing. So even if it looks like it’s a government agency like the Social Security Administration calling, or like the call is from a local number, it could be a scammer calling from anywhere in the world.

Scammers make unsolicited calls
Phone scams come in many forms, but they tend to make similar promises and threats, or ask you to pay certain ways. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or phishing emails.

Callers try to scare their victims
Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke a license if the victim doesn’t immediately pay a debt, fine, or fee.

Online Shopping Scams

Online shopping scams happen when you purchase items online at extremely low or unbelievable prices but never receive them. Tempting ads on social media will promote incredible prices and have links that take you to sites that appear to be legitimate and sell well-known brands, but these sites are often fake. Be wary of websites that have no contact information, broken contact forms, or use personal email addresses. Type the name of the online store or its web address into a search engine to see what others have said about it. Look for terms like “fraud,” “scam,” “never again,” and “fake.” Be very cautious of online promotions or deals that appear too good to be true. It’s far safer to purchase items that may cost slightly more, but from trusted sites that you or your friends have used before.

Money Mule Scams

A Money Mule scam is a type of scam in which criminals use their victims to move stolen funds. Money mule scams can take many forms, and commonly involve online dating, work-at-home jobs or prizes. In a typical scam, the fraudster sends the victim money to deposit into a bank account and then asks them to send some of it to someone else, usually through a gift card or a wire transfer. When the initial check is later found to be fake, victims are on the hook for the full amount.

You can avoid money mule scams by never using your own bank account or opening a new account in your name to transfer money for an employer; never pay to collect a prize or move any money out of your “winnings”; and never send money to an online love interest. If a money mule scam is suspected, you should break off contact with the scammer, inform your bank and report the incident to the FTC.

How do you avoid being a victim?

  • Be suspicious of unsolicited phone calls, visits, or email messages from individuals asking about employees or other internal information. If an unknown individual claims to be from a legitimate organization, try to verify his or her identity directly with the company.
  • Do not provide personal information or information about your organization, including its structure or networks, unless you are certain of a person’s authority to have the information.
  • Do not reveal personal or financial information in email, and do not respond to email solicitations for this information. This includes following links sent in email.
  • Do not reveal personal information (account numbers, social security numbers, etc.) on a phone call unless you have initiated the phone call.
  • Don’t send sensitive information over the internet before checking a website’s security. (See Protecting Your Privacy for more information.)
  • Pay attention to the Uniform Resource Locator (URL) of a website. Look for URLs that begin with “https”—an indication that sites are secure—rather than “http.”
    Look for a closed padlock icon—a sign your information will be encrypted.
  • If you are unsure whether an email request is legitimate, try to verify it by contacting the company directly. Do not use contact information provided on a website connected to the request; instead, check previous statements for contact information. Information about known phishing attacks is also available online from groups such as the Anti-Phishing Working Group.
  • Install and maintain anti-virus software, firewalls, and email filters to reduce some of this traffic. (See Understanding Firewalls for Home and Small Office Use, Protecting Against Malicious Code, and Reducing Spam for more information.)
  • Take advantage of any anti-phishing features offered by your email client and web browser.

What do you do if you think you are a victim?

  • If you believe you might have revealed sensitive information about your organization, report it to the appropriate people within the organization, including network administrators. They can be alert for any suspicious or unusual activity.
  • If you believe your financial accounts may be compromised, contact your financial institution immediately and close any accounts that may have been compromised. Watch for any unexplainable charges to your account.
  • Immediately change any passwords you might have revealed. If you used the same password for multiple resources, make sure to change it for each account, and do not use that password in the future.
  • Watch for other signs of identity theft. (See Preventing and Responding to Identity Theft for more information.)
  • Consider reporting the attack to the police, and file a report with the Federal Trade Commission.

Cape & Coast Bank Awards $124,750 in Grants to Local Nonprofits

capeandcoastbk on December 17, 2024

Cape & Coast Bank, through its Charitable Foundation Trust (The Coop Foundation) has awarded $124,750 in grants and donations to local nonprofit organizations dedicated to improving the lives of Barnstable County residents.

During recent meetings of the foundation’s Board of Trustees, the following new grants were awarded for the second and third quarters of the bank’s 2025 fiscal year:

  • $50,000 to YMCA Cape Cod, distributed in four annual installments, to support the construction of a new YMCA branch in Falmouth.
  • $10,000 to Community Health Center of Cape Cod, distributed in two annual installments, to support the organization’s ‘Expanded Access in Sandwich” campaign to construct a new 19,970 square-foot building to serve the community’s comprehensive health care needs.
  • $10,000 to Habitat for Humanity of Cape Cod to help fund the construction of four affordable and energy-efficient homes in Wellfleet. Cape & Coast Bank also offers Habitat for Humanity of Cape Cod homeowners an expedited mortgage process, allowing them to keep their mortgages local.
  • $5,250 to Sharing Kindness, Inc. to establish and launch a “Hope Squad” to offer grief support, mental health education and suicide awareness and prevention at a campus of Sturgis Charter Public School in Hyannis.
  • $5,000 to Cape Cod Village Center for Developmental Disabilities to help fund its Creative Connections program, which fosters self-expression, social skills and emotional and physical wellbeing in young adults with autism or other developmental disabilities.
  • $5,000 to Champ Homes to support its Transitional Housing Assistance Program (THAP) which provides safe and stable housing, utilities and case management services to approximately 75 clients.
  • $2,500 to AIDS Support Group of Cape Cod to support and expand its Overdose Training, Prevention and NARCAN Response programs to continue its key role in fighting to save lives on Cape Cod.
  • $2,500 to Cape Cod Children’s Place to support its Wellspring Project, a program that supports early childhood educators and caregivers of young children to nurture the development of resilience and social wellness of children ages 0-5 and the adults who care for them.
  • $2,500 to Cape Cod Council of Churches to assist in the funding of its Faith Family Kitchen, which serves hot meals three evenings per week to families and individuals in the mid-Cape Community that are experiencing food insecurity.
  • $2,500 to Falmouth Service Center to purchase frozen meats, fresh produce and dairy items for clients to alleviate the rising cost of groceries and continued inflation.
  • $2,500 to Friends of Bourne Council of Aging/Friends Food Pantry to assist those in the town of Bourne experiencing food insecurities due to economic hardship.
  • $2,500 to Mass Appeal, Inc. to be used for its Underwear Program, which offers children on the Outer and Lower Cape with new underwear, fostering a positive self-image and sense of autonomy.
  • $2,000 to One Shared Spirit, Inc. to provide addiction support and education in Barnstable County to reduce the frequency of overdoses with life-saving supplies, education and a stigma-free environment.

“We are proud to support the dedicated nonprofit organizations throughout Cape Cod that are the beneficiaries of the latest Coop Foundation and Corporate Giving grants and donations,” said Lisa Oliver, Chair, President and CEO, Cape & Coast Bank. “As a true community bank, we are keenly – and often firsthand – aware of the socioeconomic issues affecting the region and are compelled to do whatever we can to assist nonprofits serving Barnstable County.”

The Coop Foundation also issued the third $12,500 installment of a four-year, $50,000 grant to Housing Assistance Corporation to support its THRIVE Workforce Rental Housing Voucher Program, as well as a final $10,000 installment of a three-year, $30,000 grant to Amplify POC Cape Cod to support program and capacity building.

Business Toolbox: What You Need to Know About Accessory Dwelling Units (ADUs) and Financing

capeandcoastbk on December 13, 2024

Charlotte Green headshotAccessory Dwelling Units, or ADUs, are becoming a popular housing solution across the Cape, where the housing market is tight and rental demand is high.

ADUs can take many forms. There is a lot of interest and momentum in standalone structures, but  traditionally they have taken the form of a converted garage or basement apartment. They are fully functional homes with their own kitchens, bathrooms, living areas, and often modest yard space and parking.

ADUs also can be a practical choice for homeowners seeking to maximize their property’s value. An ADU can provide homeowners with a revenue stream; however, there are upfront costs to convert or build the space. Cape & Coast Bank offers financing solutions to help homeowners realize an ADU investment. The right approach depends on your financial situation, project specifics, and long-term goals.

A Home Equity Line of Credit (HELOC) is one of the most popular ways to finance an ADU. It allows homeowners to borrow against the equity in their existing property, offering a flexible and cost effective way to access funds as needed for construction. HELOCs offer flexibility, allowing you to borrow only what you need, when you need it. During what is called the draw period, you may only be required to pay interest on the amount borrowed, holding down initial costs. In addition, HELOCs often have lower interest rates compared to personal loans.

For those who prefer a fixed loan with predictable monthly payments, a home equity loan could be the right choice. With this approach a homeowner receives a lump sum based on their home’s equity, which is then repaid over time at a fixed interest rate. This method is ideal for homeowners who have a clear budget for their ADU  project and prefer the certainty of fixed payments.

Another alternative to consider is a construction loan. Cape & Coast Bank offers construction loans tailored to provide short-term financing, covering costs during the building process of your ADU. Once the project is complete, the loan converts to a traditional mortgage or be refinanced into another type of financing, such as a HELOC.

With several financing pathways available, Cape & Coast Bank provides personalized service to help homeowners make informed decisions. Our loan officers are well versed in all aspects of ADU financing and can recommend solutions to fit your unique needs.

Contact Cape & Coast Bank today to explore your options and take the first step toward building an ADU. Whether you’re in the planning phase or ready to break ground, our team is here to help homeowners unlock the potential of their property and contribute to addressing housing needs in our region.

Charlotte Green is First Vice President, Residential Mortgage Sales Manager, NMLS# 994452, at Cape & Coast Bank.

MEMBER FDIC | MEMBER DIF | EQUAL HOUSING LENDER NMLS# 520663.

2024 Holiday Giving

capeandcoastbk on December 6, 2024

volunteers shopped for Dress a Live Doll

Employees volunteered to shop for children via The Salvation Army’s Dress a Live Doll program.

Paying It Forward

In 2024, we raised about $26,000 through our employee-managed #PayingItForward Program to help 26 nonprofit organizations. For the past 14 years, our employees have supported local nonprofit organizations in our community by wearing jeans at work.

Every other Friday, employees donate a minimum of $5, and an organization is designated as the beneficiary. The organizations are nominated by employees and selected by the employee-based Pay It Forward committee. The only criteria for nominations is that the organization be affiliated with Cape Cod and a registered 501(c)3.

This holiday season, our employees worked in teams to use #PayItForward funds for the following holiday community programs:

employees helped put together and deliver holiday meals in MashpeeHoliday Meal Deliveries

The Mashpee Chamber of Commerce is proud to organize and deliver holiday dinners to home-bound and in-need Mashpee residents. This year, our sponsorship helped with the cost of the meals. Our team also joined in to help make the deliveries!

Meals On Wheels

For the past 11 years, the Bank has provided holiday cards to be distributed with the Meals on Wheels deliveries for seniors served by the Barnstable Senior Center. We also have employees who volunteer to deliver meals on a weekly basis throughout the year.

#GivingTuesday

Our decade-long tradition of supporting local food pantries on Giving Tuesday expanded this year to include food distribution organizations in all 15 towns in Barnstable County.

Food pantries receiving $1,000 donations include:

Two pantries received an adjusted $500 Giving Tuesday donation. Both Friends Food Pantry in Bourne and Falmouth Service Center in Falmouth applied for and received grants from The Coop Foundation to help defray the cost of purchasing frozen meats, fresh produce and dairy items for their clients.

The Coop has also donated $3,000 to Lower Cape Outreach Council for its food pantries in Brewster, Chatham, Eastham, Orleans and Wellfleet. The additional $2,000 is a directed gift from two retiring trustees of The Coop Foundation.

Organizations providing food support to larger regions of the Cape are also part of the Giving Tuesday donations, including  the AIDS Support Group of Cape Cod food pantries in Hyannis and Provincetown, Family Table Collaborative, Sustainable CAPE, and Cape Kid Meals.

Cape & Coast Bank Supports Local Food Pantries in all 15 Barnstable County Towns on Giving Tuesday

capeandcoastbk on December 3, 2024

Cape & Coast Bank will provide $15,000 in financial support to food pantries throughout the region on Giving Tuesday 2024.

The bank’s decade-long tradition of supporting local food pantries on Giving Tuesday, which began in 2014 as a “restock the shelves campaign,” has been expanded this year to include food distribution organizations in all 15 towns in Barnstable County.

Food pantries receiving $1,000 donations include:

Two pantries received an adjusted $500 Giving Tuesday donation. Both Friends Food Pantry in Bourne and Falmouth Service Center in Falmouth applied for and received grants from The Coop Foundation to help defray the cost of purchasing frozen meats, fresh produce and dairy items for their clients.

The Coop has also donated $3,000 to Lower Cape Outreach Council for its food pantries in Brewster, Chatham, Eastham, Orleans and Wellfleet. The additional $2,000 is a directed gift from two retiring trustees of The Coop Foundation.

“There are too many of our friends and neighbors suffering from food insecurity on Cape Cod, which is only exacerbated by inflation and the continuing affordable housing crisis,” said Lisa Oliver, Chair, President and CEO of Cape & Coast Bank. “The Coop applauds the dedication and hard work of our local food pantries and their volunteers to ensure Cape Cod families have food on the table. Please join us and generously support our local food pantries during the holiday season and throughout the year.”

Organizations providing food support to larger regions of the Cape are also part of the Giving Tuesday donations, including  the AIDS Support Group of Cape Cod food pantries in Hyannis and Provincetown, Family Table Collaborative, Sustainable CAPE, and Cape Kid Meals.

Business Toolbox: How a HELOC from Cape & Coast Bank Can Help You in the New Year

capeandcoastbk on November 18, 2024

Custom Master Bathroom Design Drawing with Cross Section of Finished Photo.

Custom Master Bahroom Design Drawing with Cross Section of Finished Photo.

As the year comes to a close, many homeowners look for ways to prepare for upcoming expenses or tackle desired home improvements. A Home Equity Line of Credit (HELOC) from Cape & Coast Bank can allow homeowners to address these needs with flexibility and affordability.

A HELOC allows homeowners to borrow against the equity in their home, making it a low-cost financing option. Unlike traditional loans that provide a lump sum at closing, a HELOC functions more like a credit card: homeowners have access to a credit line from which they can draw funds as needed. As the balance is repaid, those funds become available again for use. This feature allows expenses and payments to be managed according to a needs-based schedule.

HELOCs from Cape & Coast Bank come with several benefits. During the draw period, homeowners can make interest-only payments, freeing up monthly cash flow for other priorities. The bank provides both variable and fixed-rate HELOC options, allowing borrowers to select the structure that best fits their goals. Competitive rates typically make HELOCs more affordable than other credit options, such as personal loans. For eligible uses, such as home improvements, interest on a HELOC is, in some cases, tax-deductible (consulting a tax advisor is recommended to confirm eligibility).

Additionally, Cape & Coast Bank offers a fixed-rate Home Equity Loan (HELoan) for those seeking predictable monthly payments. With a discount available for automatic payments from a Coop bank account, this option is ideal for homeowners with larger, one-time expenses like major renovations. Those looking to invest in income-generating Accessory Dwelling Units (ADUs) also have support through the bank’s flexible qualification options, allowing projected rental income to count toward the HELOC qualification. The bank offers loan amounts up to $450,000 for the ADU loan, and has no limit on traditional HELOCs, suitable for a range of projects from home improvements to converting unused spaces into a rental unit.

All loan decisions for Cape & Coast Bank’s HELOC program are made locally in Hyannis, allowing for faster approvals, trusted service, and an understanding of our local market. Homeowners can apply online or consult with a bank representative to discuss their specific goals and determine the best loan structure for a HELOC. Whether planning a home improvement project, consolidating debt, or covering seasonal expenses, a HELOC from Cape & Coast Bank is designed to provide flexible support for financial needs.

For more details or to start a HELOC application, visit Cape & Coast Bank’s website.

Charlotte Green is the FVP, Residential Mortgage Sales Manager at Cape & Coast Bank. She can be reached at 508.568.3308 or cgreen@mycapecodbank.com. NMLS ID #994452

Member FDIC • Member DIF • Equal Housing Lender
Bank NMLS ID #520663

American Banker names Lisa Oliver as one of The Most Powerful Women to Watch for Second Consecutive Year

capeandcoastbk on September 26, 2024

American Banker names Lisa Oliver as one of The Most Powerful Women to Watch for Second Consecutive Year Lisa Oliver, Chair, President and CEO of Cape & Coast Bank, has been named one of 2024’s The Most Powerful Women to Watch honorees by American Banker magazine. She was also named to the prestigious financial industry list in 2023.

Now in its 22nd year, American Banker’s The Most Powerful Women in Banking™ initiative recognizes individuals and teams for demonstrating exceptional leadership skills, strong business performance and a commitment to driving real outcomes for diversity, equity and inclusion in financial services.

“Keep your eyes on these women in the years ahead,” said Chana Schoenberger, Editor-in-Chief of American Banker. “They exemplify modern leadership, with significant contributions to both their businesses and the industry at large. It hasn’t been an easy year for banks and financial institutions, but progress continues — not by chance, but through the determined efforts of these women.”

In addition to leading The Coop to increases in net income, return on average assets and overall growth in total assets during a year when the global economic climate was less than robust, Oliver led a successful strategy to invest in digital tools and services to create a more client-supportive environment. She recruited a digital officer for the bank and enhanced and expanded banking and digital deposit account services across multiple channels. Oliver also focused on increasing cash management solutions and opportunities for business clients, expanding the bank’s fraud protection awareness efforts and elevating the organization’s enterprise risk management processes.

“I remain truly humbled and honored to be included among this extraordinary group of women who are making a profound impact on the nation’s banking industry,” said Oliver. “I must thank the entire team from the Coop for their support and tenacity in delivering exceptional banking products and superior customer service. I am also exceptionally proud of the Coop’s philanthropic efforts to help alleviate critical issues affecting our region and achieving our vision of transforming lives through the power of community banking.”

The honorees will be recognized at THE MOST POWERFUL WOMEN IN BANKING Gala on Oct. 24 at The Glasshouse in New York City.

Cape & Coast Bank Appoints Kenneth Tingle to Business Intelligence Manager

capeandcoastbk on September 10, 2024

Kenny TingleCape & Coast Bank has announced the appointment of Kenneth Tingle to the newly created role of First Vice President, Business Intelligence Manager.

Under Kenny’s leadership of the Business Intelligence function, Cape & Coast Bank will further enhance and define the team process of data analytics to support collaboration across all bank departments.

Kenny, an accomplished financial services professional, joins the bank from Cambridge Trust, recently acquired by Eastern Bank, where he served as Data Analytics Manager before assuming duties as Vice President of Sales and Data Analytics. He also served as a Private Banking Manager with Cambridge Trust and as a Bank Manager with Belmont Savings Bank.

“We welcome Kenny and look forward to leveraging his notable business intelligence expertise to ultimately benefit our clients,” said Lisa Oliver, Chair, President and CEO of Cape & Coast Bank. “An enhanced ability to transform raw data into actionable insights will help us identify trends, anticipate customer needs and respond to market conditions – helping us fulfill our mission to be the best bank on Cape Cod.”

A graduate of Franklin Pierce University with a bachelor’s degree in finance, Kenny’s coursework includes cost accounting and finance as well as corporate marketing. He is also a former member of the New Hampshire Banker’s Legislative Committee.

“The Coop is an institution that is built on serving the community, and I look forward to joining a management team that is dedicated to continually enhancing its products and services,” said Kenny. “In my role managing business intelligence, I will work to drive the mission forward by promoting actionable solutions that have direct benefit to customers.”

What are 529 College Savings Plans?

capeandcoastbk on August 22, 2024

Young male graduate student against university background, AI generated

Young male hispanic graduate student wearing academic hat and gown against of university background and graduates students. Generative AI

529 savings plans are tax-advantaged education savings vehicles and one of the most popular ways to save for college today. They can also be used to save for K-12 tuition. Much like the way 401(k) plans changed the world of retirement savings a few decades ago, 529 savings plans have changed the world of education savings.

529 plans were created by Congress in 1996 and have been modified through the years by various pieces of legislation. Known officially as “qualified tuition programs” or QTPs, 529 plans are so named because they are governed by section 529 of the Internal Revenue Code.

Tax advantages and more

529 savings plans offer a unique combination of features that no other education savings vehicle can match:

  • Federal tax advantages: Contributions to a 529 account accumulate tax deferred and earnings are tax free if the money is used to pay the beneficiary’s qualified education expenses. (The earnings portion of any withdrawal not used for qualified education expenses is taxed at the recipient’s rate and subject to a 10% penalty.)
  • State tax advantages: States are free to offer their own tax benefits to state residents, such as a tax deduction for contributions.
  • High contribution limits: Most plans have lifetime limits of $350,000 and up (limits vary by state).
  • Unlimited participation: Anyone can open a 529 savings plan account, regardless of income level.
  • Wide use of funds: Money in a 529 savings plan can be used to pay the full cost (tuition, fees, housing, food, books, supplies) at any accredited college or graduate school in the United States or abroad; for certified apprenticeship programs (fees, books, supplies, equipment); for student loan repayment (there is a $10,000 lifetime limit per 529 plan beneficiary and $10,000 per each of the beneficiary’s siblings); and for K-12 tuition expenses up to $10,000 per year.
  • Professional money management: 529 savings plans are offered by states, but they are managed by designated financial companies who are responsible for managing the plan’s underlying investment portfolios.
  • Flexibility: Under federal rules, you are entitled to change the beneficiary of your account to a qualified family member at any time as well as roll over (transfer) the money in your account to a different 529 plan once per calendar year without income tax or penalty implications.
  • Accelerated gifting: 529 savings plans offer an estate planning advantage in the form of accelerated gifting. This can be a favorable way for grandparents to contribute to their grandchildren’s education while paring down their own estate, or a way for parents to contribute a large lump sum. Under special rules unique to 529 plans, a lump-sum gift of up to five times the annual gift tax exclusion amount ($18,000 in 2024) is allowed in a single year, which means that individuals can make a lump-sum gift of up to $90,000 and married couples can gift up to $180,000. No gift tax will be owed, provided the gift is treated as having been made in equal installments over a five-year period and no other gifts are made to that beneficiary during the five years.
  • Transfer to ABLE account: 529 account owners can roll over (transfer) funds from a 529 account to an ABLE account without federal tax consequences. An ABLE account is a tax-advantaged account that can be used to save for disability-related expenses for individuals who become blind or disabled before age 26.

Choosing a 529 savings plan

Although 529 savings plans are governed by federal law, their implementation is left to the states. Currently, there are over 50 different savings plans available because many states offer more than one plan.

You can join any state’s 529 savings plan, but this variety may create confusion when it comes time to select a plan. Each plan has its own rules and restrictions, which can change at any time. To make the process easier, it helps to consider a few key features:

  • Your state’s tax benefits: A majority of states offer some type of income tax break for 529 savings plan participants, such as a deduction for contributions or tax-free earnings on qualified withdrawals. However, some states limit their tax deduction to contributions made to the in-state 529 plan only. So make sure to understand your state’s rules.
  • Investment options: 529 savings plans vary in the investment options they offer. Ideally, you’ll want to find a plan with a wide variety of investment options that range from conservative to more growth-oriented to match your risk tolerance. To take the guesswork out of picking investments appropriate for your child’s age, most plans offer aged-based portfolios that automatically adjust to more conservative holdings as your child approaches college age. (Remember, though, that any investment involves risk, and past performance is no guarantee of how an investment will perform in the future. The investments you choose may lose money or not perform well enough to cover college costs as anticipated.)
  • Fees and expenses: Fees and expenses can vary widely among plans, and high fees can take a bigger bite out of your savings. Typical fees include annual maintenance fees, administration and management fees (usually called the “expense ratio”), and underlying fund expenses.
  • Reputation of financial institution: Make sure that the financial institution managing the plan is reputable and that you can reach customer service with any questions.
  • User experience: Is the plan’s website easy to use? Can you easily take care of routine tasks online, such as set up automatic monthly contributions, change your contribution amount, research plan investments, find your rate of return, or request a withdrawal?

With so many plans available, it may be helpful to consult an experienced financial professional who can help you select a plan and pick your plan investments. In fact, some 529 savings plans are advisor-sold only, meaning you must go through a designated financial advisor to open an account.

Account mechanics

Once you’ve selected a plan, opening an account is easy. You’ll need to fill out an application, where you’ll name a beneficiary and select one or more of the plan’s investment portfolios to which your contributions will be allocated. Also, you’ll typically be required to make an initial minimum contribution, which must be made in cash or a cash alternative.

Thereafter, most plans will allow you to contribute as often as you like. This gives you the flexibility to tailor the frequency of your contributions to your own needs and budget, as well as to systematically invest your contributions by setting up automatic monthly transfers from your bank account.

As for investment changes, beware that under federal law you are allowed to exchange your existing plan investments for new investments only twice per year. In other words, if your existing plan funds are currently invested in plan portfolios A & B but you want to change them to plan portfolios C & D, you can do this only twice per calendar year. However, you generally have unlimited say in how your future contributions will be invested.

You will also be able to change the beneficiary of your 529 savings account to a qualified family member with no income tax or penalty implications.

529 prepaid tuition plans — a distant cousin

There are actually two types of 529 plans — savings plans and prepaid tuition plans. The tax advantages of each are the same, but the account features are very different. A prepaid tuition plan lets you prepay tuition at participating colleges, typically in-state public colleges, at today’s prices for use by the beneficiary in the future. 529 prepaid tuition plans are generally limited to state residents, whereas 529 savings plans are open to residents of any state. Prepaid tuition plans are much less common than savings plans.

Note: Investors should consider the investment objectives, risks, charges, and expenses associated with 529 plans before investing; specific plan information is available in each issuer’s official statement. There is the risk that investments may not perform well enough to cover college costs as anticipated. Also, before investing, consider whether your state offers any favorable state tax benefits for 529 plan participation, and whether these benefits are contingent on joining the in-state 529 plan. Other state benefits may include financial aid, scholarship funds, and protection from creditors.

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Prepared by Broadridge Advisor Solutions. © 2024 Broadridge Financial Services, Inc.

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