Starting on Apr. 24, Upromise will offer parents a chance to save for children's college costs each time they spend money at companies in its network--such as AT&T, Citibank, and GM. Here's how the program operates:
-- Each company sends a portion of the funds you spend to your Upromise account. For example, AT&T has agreed to pay 4% of any outlays, so if you spend $50 a month, say, on long-distance service, your Upromise account will get $24 a year.
-- Once every quarter, Upromise deposits the money into your child's so-called 529 account, part of a new tax-deferred college-saving system that most states have set up. The accounts are managed by firms such as Fidelity and Salomon Smith Barney.
-- Friends and relatives can sign up, too, so that their spending benefits your child's college-tuition fund. You can also add directly to the funds in your account--in much the same way you would to a regular savings account.
Data: Upromise Inc.