COVID-19 Update: Due to the recent uptick in cases in the immediate area, we’re taking the initial precaution of closing our Danbury Branch lobby and will only be assisting members at that location via our drive-up until further notice.
As tuition continues to rise, so does the need to save for related expenses.
With a Coverdell Education Savings Account, you can help the student in your life cover the cost of their elementary, secondary, and post-secondary education. Your earnings will grow tax-free and can be withdrawn without tax penalty any year the beneficiary has qualified education expenses.
Coverdell Education Savings 101
Who can contribute?
You can contribute to a Coverdell Education Savings Account as long as the beneficiary, who does not have to be your child, is under the age of 18. Certain income restrictions apply.
Are my contributions tax deductible?
No, your contributions cannot be deducted.
How much can I contribute annually?
$2,000 per beneficiary
When can I withdraw money?
The account beneficiary can make tax-free withdrawals during any year they have qualified education expenses, such as tuition and fees, room and board, books, and computers.
To avoid tax and penalties, the account must be fully withdrawn prior to the beneficiary turning 30 years old. You can also change the beneficiary to a qualifying family member, as long as they are under the age of 30.
We do not offer tax advice. You should always consult with a tax professional when it comes to your contributions and deductibility.