Coverdell Education Savings Account (ESA)
Savings for a child’s education has never been easier! Private elementary, secondary and college expenses usually come with a big price tag. Saving now for your child’s education is important in ensuring they have the funds they need. A Coverdell ESA is a savings plan that enables you to start saving today for higher education expenses in the future on a tax-deferred basis. It’s a great way for parents, grandparents or others to help students with education costs. The funds deposited in a NET Credit Union Coverdell Education Savings Account grow tax-free and are tax-free when withdrawn for K-12 or college education expenses, such as tuition, books and more. Start saving for your child’s education now with an account at NET Credit Union.
Features & Benefits of an Education Savings Account
- Contributions are limited to $2,000 per year per child
- No Minimum balance to open a Coverdell account
- Contributions allowed for students up to 18 years of age
- Taxes will apply if the funds are not used for eligible expenses
- Members are not required to have earned income
- Contributions to a Coverdell Education Savings Account & a 529 Savings Plan are allowed in the same year for the same student
- Contributions may be made until the original due date of your tax return, normally April 15 of the next year.
- Earnings grow tax deferred
- Contributions are not tax deductible
- Withdrawals are tax free if used for qualified higher education expenses, such as room, board and tuition.
- Withdrawals for qualified elementary and secondary school expenses are tax-free
- Funds must be withdrawn by the student’s 30th birthday or taxes and penalties may apply (except for special needs students)
Understand all your retirement options
All Savings Products are Variable Rate and subject to change without notice. NET does not provide tax, legal or accounting advice. This website has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.