Sallie Mae's reinvention continues.

In an effort to offer a wider array of college savings products, SLM Corp., the education lending and savings company better known as Sallie Mae, announced last week that it had introduced FDIC-insured, high-yield online savings accounts and certificates of deposit.

Kelly Christiano, the vice president of retail deposits at Sallie Mae, said it is crucial to offer additional products to help more conservative investors save for college. Sallie Mae has offered 529 college savings plans since it bought Upromise Investments in 2006. Through Upromise, Sallie Mae manages more than $23 billion in 529 plans.

"We know that the 529 products have been very successful, but we believe that it behooves us to have more vehicles," she said. "According to data we have seen from Gallup, 59% of parents use savings accounts and CDs to help save for their children's college education. We felt that, adding more options, more people would be able to save."

Christiano said the high-yield savings account and the CD are the first in a series of retail banking products that Sallie Mae will introduce. The savings account offers a 1.35% annual percentage yield, which is five times the national average, according to Bankrate.com.

"We are looking at other options and building a product road map," she said. "We plan to launch more products and features down the road. Right now, we are trying to determine what types of products will work. We are very committed to developing this platform."

Analysts said they are not aware of any other 529 plan providers offering retail banking products. Sallie Mae, as a diversified financial services company, is in a unique position, they said.

The new products can be used in conjunction with Upromise's rewards program.

Upromise, which manages 529 programs for 11 states, offers rebates on everything from supermarket purchases to "big-ticket" rebates from financial services companies, such as Coldwell Banker Real Estate LLC, ERA Franchise Systems LLC and Century 21 Real Estate. Upromise members have earned $525 million through its free rewards program.

People who sign up with Upromise Rewards and link it to a high-yield savings account can get 10% of their annual reward added to the high-yield account if they maintain a $5,000 minimum balance or deposit more than $25 a month into the account, Christiano said.

"People that are saving like to save in multiple ways. They are using a 529, but they also save with a money market fund or a CD. People in different life stages want different options," she said.

Joe Hurley, the founder of Savingforcollege.com, said loyalty programs are a "valuable enhancement" because they are "an easy way for shoppers to get dollars into college 529 savings accounts without any extra effort."

"As long as it is a free service, and they aren't spending on items they wouldn't otherwise purchase, it is a no-lose proposition," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.