Also known as CESA
(Coverdell Education Savings Account)

 

This IRA was initially created to pay the qualified higher education expenses of any recipient under the age of 18. But now, it can also be used for elementary and secondary school expenses. Funds withdrawn for qualified education expenses are tax-free. Save now for that special one’s future. Consult your tax advisor to determine which IRA is right for you.

Individuals or non-individuals (such as corporations, companies or charities) can contribute up to $2,000 per child per year, as long as your Modified Adjusted Gross Income is within prescribed limits Contributions can be made until child is 18 years old - children with special needs are not subject to this restriction. With the market rate variable interest option, you can open an account with just $5.00 Flexibility of term from 12 months to 30 months with a $500 fixed rate IRA Rate guaranteed for the term of the fixed rate IRA Interest compounded daily FDIC insured up to $100,000, separately from other non irrevocable trust deposits Can rollover funds from another Education IRA for the benefit of a new recipient who is a family member and under the age of 30, with no tax liability Withdrawals can be made without penalty and are tax-free to pay for qualified higher education expenses and elementary and secondary school expenses. Withdrawals can be made without penalty, but earnings will be taxed, due to the death or permanent disability of the child The amount of qualified higher education expenses is reduced due to scholarship, allowance or payment. Contributions can be made any time during the calendar tax year or no later than April 15th of the following year Contributions are not tax deductible Possible early withdrawal penalty

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