In an effort to offer a wider array of college savings products, SLM Corp., an education lending and savings company known better as Sallie Mae, launched an FDIC-insured, high-yield online savings account and certificate of deposit.

Kelly Christiano, the vice president of retail deposits for Sallie Mae, said that it has offered 529 college savings plans to individuals since it bought Upromise Investments in 2006. Through the unit, Sallie Mae manages more than $23 billion in 529 college savings plans. 

Christiano said that it was critical for Sallie Mae to offer additional products so that it could help more conservative investors save for college.

“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 by adding more options more people would be able to save.”

Christiano said that the high-yield savings account and the CD, which were launched last week, are the first in a series of retail banking products that Sallie Mae plans to introduce through its banking arm, Sallie Mae Bank. The high-yield 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 we are building a product roadmap,” 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 that they are not aware of other 529 plan providers that are offering retail banking products. They said that Sallie Mae, as a diversified financial services company, is in a unique position.

Christiano said that the retail banking products have a lot of potential for existing customers and potentially as a way to generate new customer relationships.

“We have developed a strong brand with Sallie Mae and Upromise and people have been saving with us and paying off their college loans through us for years,” she said. “This is just one more option.”

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

Upromise, which manages 529 plans 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 Estates.

Upromise’s members have earned a total of $525 million through its free rewards program.

If an individual signs up with Upromise Rewards and links to a high-yield savings account, he can received a 10% annual reward from savings as long as he or she maintain a $5,000 minimum balance or deposits more than $25 a month into the account, Christiano said.

“Ultimately we decided it was critical to offer options,” she 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.”

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.