Our ESA Plans are a safe way to save for your child's education.
We offer all of our innovative certificates of deposit (CollegeSure, InvestorSure, Fixed Rate CDs) through an ESA account.
Coverdell Education Savings Accounts (ESAs)
Coverdell ESAs are established by individual taxpayers with children under the age of 18 seeking to save for education expenses, including elementary, secondary or postsecondary education. Contributions are not tax-deductible, however qualified withdrawals, including accumulated interest are tax-free.
A College Savings Bank Coverdell ESA is appropriate for investors seeking:
- tax-free distributions;
- tax-deferred accumulation of interest;
- tax-free withdrawals for education expenses;
- shelter from financial aid considerations; and
- asset control.
Coverdell ESA Forms
Single incomes under $95,000 and joint incomes under $190,000 may contribute up to $2,000 annually per beneficiary until the child reaches age 18. Non-deductible contributions grow tax free and distributions are tax free for qualified education expenses. The contribution limit is gradually reduced for single individuals with incomes between $95,000 and $110,000 (between $190,000 and $220,000 for married taxpayers filing jointly). Although no earned income is required to open an ESA, individuals who earn amounts above the maximum levels may not contribute. However, a child (beneficiary) who meets the income restrictions may contribute to a College Savings Bank ESA.
To qualify for the tax benefit, distributions generally must be used to cover the child's tuition, fees, room and board at an eligible higher education institution, elementary school or secondary school.