When you decide to set up an ABLE account, one size doesn’t fit all. That’s why we’ve proposed several investment options to help you find the one that best fits your needs.
Choosing cash verses investment
The Cash Option
The Cash Option deposits 100% of its funds into an FDIC-insured account with The Bank of New York Mellon (the “Bank”). FDIC insurance generally protects up to $250,000 of your deposits at the same bank in the same ownership right and capacity. Your ABLE Account invested in the FDIC Savings Fund, will be insured up to $250,000.
Investment portfolio options
You may also choose one of four investment portfolios with different investment strategies: ABLE Fixed Income, ABLE Conservative, ABLE Moderate, or ABLE Aggressive. Each investment option has its own benefits and risks — compare them below:
ABLE Fixed Income
The ABLE Fixed Income Investment Option seeks to provide current income and reduced volatility in a portfolio of mutual funds intended to produce an overall investment exposure of 100% bonds. Overall, this portfolio is designed to reduce risk and provide limited appreciation potential, as well as provide for a shorter investment period.
ABLE Conservative seeks to provide current income and some growth by investing in a portfolio of mutual funds that consists of 20% stocks and 80% bonds. Overall, there’s a small amount of risk and limited appreciation potential, designed for a shorter investment period.
ABLE Moderate seeks to provide a combination of growth and current income by investing in a portfolio of mutual funds that consists of 50% stocks and 50% bonds. Overall, there’s a medium level of risk for a pursuit of investment return, designed for a medium or uncertain time horizon.
ABLE Aggressive provides the potential to grow by investing in a portfolio of mutual funds that consists of 84% stocks and 16% bonds. Overall, there’s a higher level of risk and potential for return (or loss), designed for a longer investment period (10 years or more).
Combined Cash and Investment Options
You can choose to invest in the Cash Option or a combination of the Cash Option and Investment Option(s). Whichever option(s) you choose, be sure to review the Program Disclosure Booklet for specific risks and be sure to check with an investment professional if you need advice.
There’s a low annual fee of $35 for each Maryland ABLE account to keep everything running smoothly. There are also asset-based fees on the underlying mutual funds, which are a part of each of the investment options, and an administrative fee assessed on the overall account assets. These add up to between 0.30% and 0.38% of the account’s balance per year. Additional fees are added when you opt out of electronic statements or request a withdrawal check, instead of doing everything online. You can check them out in our Program Disclosure Booklet.