Saving for a child’s education is one of the most important goals a family can set. A Coverdell Education Savings Account (ESA) from 1st Ed Credit Union offers a tax-advantaged way to save for qualified education expenses, from kindergarten through college.
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IRA Accumulation (Traditional,Roth,Education)
| Info and/or Terms | Interest Rate | APY |
|---|---|---|
| IRA Accumulation | 0.25% | 0.250% |
*APY=Annual Percentage Yield. Earnings are compounded and credited monthly. Rates are subject to change at any time without prior notice.
The content on this page is for informational purposes only, please consult your tax advisor about your particular situation. IRA and Education Accounts are subject to Regulation D. Learn more here.
Your savings are federally insured to up to $250,000 and backed by the full faith and credit of the United States Government by National Credit Union Administration (NCUA), a U.S. Government Agency.
Coverdell Education Savings Account
With a Coverdell Education Savings Account (ESA), you may save up to $2,000 per child per year. Contributions are made with after-tax dollars while earnings and withdrawals are tax-free. The account offers versatility, but funds must be used for qualified educational expenses to receive the tax-free benefits.
Benefits of a Coverdell ESA:
- Tax-free earnings and withdrawals used for qualified educational expenses
- Family members may contribute, up to the annual limit
- Transfer funds from one account to another within the same family
- Continue saving each year until the child reaches 18
- Enjoy a flexible use of funds
A Coverdell ESA is versatile and can be used for a broad range of educational needs. Funds can be applied to college, university, and public or private K-12 education expenses including tuition, tutoring, room and board, and even computer or other technology needs.
Open an Account Today!What Is a Coverdell Education Savings Account?
A Coverdell ESA is a tax-advantaged savings account for education. You contribute after-tax dollars, and your earnings grow tax-free as long as withdrawals cover qualified expenses such as tuition, books, and supplies. It is flexible enough for both K-12 and higher-education costs.
Contribution Limits and Eligibility
You can contribute up to $2,000 per child per year, and contributions must stop once the beneficiary reaches the age set by the IRS. Income limits apply to who can contribute. Our team can help you confirm whether an ESA fits your family’s situation.
ESA vs. 529 Plan
Both help you save for education, but a Coverdell ESA covers a broader range of K-12 and college expenses and offers more investment control, while a 529 plan typically allows much higher contribution limits and is geared toward college. Some families use both.
Education Savings FAQs
A Coverdell ESA is a tax-advantaged account for education. You contribute after-tax dollars and earnings grow tax-free when used for qualified expenses like tuition, books, and supplies, from kindergarten through college.
Up to $2,000 per child per year. Contributions stop once the beneficiary reaches the IRS age limit, and income limits apply to who can contribute. Our team can confirm whether an ESA fits your family.
A Coverdell ESA covers a broader range of K-12 and college expenses with more investment control; a 529 plan allows much higher contribution limits and is geared toward college. Some families use both.