Formerly known as Education IRA. Recently renamed to the Coverdell Education Savings Account, this is a smart way to save for your child’s college education. Contributions are not tax-deductible, but withdrawals are tax-free if used for tuition, fees, books, computer equipment and other qualified higher-education expenses. Contributions can be made until the beneficiary reaches 18. And, if funds are not used for one child, they can be transferred to another child in the family. The total contributions allowable per year are $2,000 per account.
Open your Coverdell Education Savings Account with an IRA Share Certificate or an IRA Contributory Savings Account.
IRA Share Certificate
A deposit of $500 will get you started with this CD, earning a fixed dividend rate of return for a fixed period of time. Dividend earnings are tax-deferred, but keep in mind that penalties apply for most early withdrawals.
IRA Contributory Savings Account
Dividend earnings are tax-deferred with this account, offering a variable dividend rate and the ability to make deposits or withdrawals at any time without penalty from Global Credit Union (IRS penalties apply for most early withdrawals). All it takes is $100 to open and you’re on your way to retirement savings.
Whatever your needs and goals are, check with your tax adviser or financial planner to make sure you’re making the most of your investment.
