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Every parent dreams of their child attending college—but higher education often comes with a hefty price tag. Our Coverdell Education Savings Account (ESA) empowers you to begin saving now while enjoying the tax benefits. You’ll be able to stand proud and prepared on the monumental day when your kid says, "I got accepted!"
Opening a Coverdell ESA with Power Financial Credit Union (PFCU) can secure your child's educational future. Plus, if you’re not already a member, joining us will grant you access to a wealth of membership benefits.
Setting aside funds for your child’s education is a wise investment in their future. A Coverdell ESA is a phenomenal tool designed to ease the financial burden of education.
Embrace the opportunity to give your child the resources they need for the education they deserve. Start saving to secure their future today!
– Claudia S.
A Coverdell Education Savings Account (ESA) is a tax-advantaged savings account designed to help you save for education expenses. Earnings grow tax-free if you use them for qualified education expenses. It’s similar to a 529 college savings plan, and you can have both simultaneously for the same beneficiary.
You can use the ESA as a college savings plan or for other items, such as tuition, fees, books, supplies, and even K-12 costs. The account has an annual contribution limit of $2,000 per beneficiary, and you can contribute to the account until your child (the beneficiary) turns 18 years old.
If your child ends up not going to college, the balance will be disbursed to the child (the beneficiary) when they turn 30. However, they’ll have to pay taxes on the funds distributed.
You can deposit funds in your credit union Coverdell Education Savings Account using these easy methods:
Contributions are not tax-deductible according to the IRS.
You have until your child is 18 years old. However, there are exceptions if your child has special needs.
Yes, you can change the beneficiary of a Coverdell Education Savings Account. The new beneficiary must be a family member under the age of 30. This flexibility is helpful if the original beneficiary decides not to pursue further education or if there are remaining funds after the initial beneficiary has completed their education.
Changing the beneficiary ensures your family can still use the funds for educational purposes.
There are income limits for contributing to a Coverdell Education Savings Account and they may change every year. In June 2023, Single filers with a Modified Adjusted Gross Income (MAGI) of $110,000 or less and joint filers with a MAGI of $220,000 or less are eligible to make contributions. Be sure to consult the IRS or a tax professional for the most current income limitations and regulations.
Personal Savings Accounts
Kid Savings Accounts
Money Market Accounts