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Save for Your Child’s Education

Open a Coverdell Education Savings Account.

College can be expensive, and planning for your child’s education early is a smart financial move. Coverdell Education Savings Accounts (ESAs) are a great way to save for future education costs while enjoying tax benefits. Here at Trailhead Credit Union, we understand the importance of education savings, and we’re happy to offer Coverdell ESAs to our members.

What is a Coverdell ESA?

A Coverdell ESA is a tax-advantaged savings account designed to help you save for a child’s qualified education expenses. Contributions to a Coverdell ESA may be tax-deductible in certain states, including Oregon. Earnings on the account grow tax-free, and qualified education withdrawals are also tax-free. This makes Coverdell ESAs a valuable tool for saving for your child’s college education, vocational school, K-12 private school tuition, or even other qualified expenses such as books, uniforms, equipment, and housing.

Benefits of a Coverdell ESA at Trailhead

  • Tax Advantages: As mentioned, contributions may be tax-deductible and earnings grow tax-free when used for qualified education expenses.
  • Flexible Contributions: There are annual contribution limits, but you can choose how much to contribute each year.
  • Multiple Beneficiaries: You can name one beneficiary per account, but you can open multiple accounts to save for several children.
  • Flexible Options: Coverdell ESAs are available as a Certificate Account with great rates and terms ranging from 6-60 months, or as an IRA/ESA Savings account.

Rolling Over Funds to Maximize Savings

Trailhead Credit Union also offers the option to rollover funds from other qualified education plans into your Coverdell ESA. This can be a great way to consolidate your savings into one account and take advantage of Trailhead’s competitive interest rates.

Here are some things to keep in mind about rollovers:

  • Rollovers must come from a qualified education plan, such as another Coverdell ESA or a 529 college savings plan.
  • There may be limitations on how often you can rollover funds.
  • Be sure to follow the rollover rules to avoid tax penalties.

Start Saving for Your Child’s Future Today

Trailhead Credit Union is committed to helping you reach your financial goals. If you’re looking for a way to save for your child’s education, a Coverdell ESA may be a great option. Contact Trailhead today to learn more about Coverdell ESAs and rollovers.

 

Additional Resources: Internal Revenue Service (IRS) information on Coverdell ESAs: https://www.irs.gov/taxtopics/tc310

This post is for informational purposes only and should not be considered financial advice. Please consult with a tax professional for advice regarding your specific situation.