Russ Wiles
The Arizona Republic columnist

It sounds like a paradox - spend your way to higher savings. Yet that's the gist behind several Web-based programs that aim to help people pad their investment accounts by spending more.

The programs do this by offering rebates on everyday consumer purchases and even big-ticket items. If you've had trouble saving through conventional means, this could be a good way to go.

Robert and Susan Moyle of Scottsdale already are seeing the potential of a customer-loyalty program. They've amassed about $1,000 over the past two years in the college accounts of their two young sons entirely from rebates on items such as groceries, gasoline, entertainment, utilities, airline tickets, general credit-card purchases and even their monthly home-security bill.

That's in addition to several thousand dollars the Moyles and relatives have added directly to the children's accounts.

"It definitely adds up," said Robert, a systems engineer at Honeywell International Inc. "And it's not requiring a lot of changes in our buying habits."

The Moyles signed up for a no-membership-fee account with Upromise Inc., a company in Needham, Mass., that offers extensive rebate opportunities. The company can be reached at www.upromise.com.

Rival Web sites offer their own saving opportunities:

BabyMint.com, a site that, like Upromise, features investments in so-called 529 college-savings accounts.

Bondrewards.com, which offers rebates that can be used to buy U.S. savings bonds.

Edexpress.com, where participants save for schooling from kindergarten to college using money that's kept in special trusts.

Nesteggz.com, a rebate program that focuses on retirement accounts.

Most of these programs feature rebates from hundreds if not thousands of restaurants, grocery stores, e-commerce sites and other merchants.

"We're in everything from Pep Boys and Staples to Bed Bath & Beyond and Circuit City," said Jim Fadule, president of Upromise Investments Inc., a subsidiary.

Other Upromise partners include American Airlines, America Online, McDonald's, Coca-Cola, Kellogg's and ExxonMobil. Rebates typically range from 1 to 10 percent of an item's purchase price.

Among the headliner deals, you can generate a benefit of up to $3,000 with Upromise if you buy or sell a home through Century 21, Coldwell Banker or ERA. Also, you can amplify certain benefits by making purchases with a Upromise credit card issued by Citibank.

As noted, Upromise focuses on college savings, featuring 529 accounts sponsored by Nevada that utilize low-cost mutual funds from the Vanguard Group.

Named after a section of the Internal Revenue Code, 529 accounts offer tax-sheltered growth and tax-free withdrawals, provided the money is used for eligible college expenses. Unlike custodial accounts, 529 plans are highly flexible. For example, you can switch the money to help another child if your intended beneficiary decides to end his or her education after high school. Also, you can save on behalf of a non-relative in a 529 account, and you can even sock away cash for your own higher education.

In short, whether you're saving for college, retirement or something else, there's a good chance you can derive a benefit by channeling your expenditures through retailers linked to Upromise or one of its competitors.

"It's not about encouraging people to spend," Fadule said, "but you'll need to do some of these things anyway."

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