Coverdell Education Savings (CESA)
A Coverdell Education Savings Account (CESA), sometimes called an Education IRA, is a trust or custodial account designed to help you set aside money for the qualified education expenses associated with elementary, secondary or higher education for your children, grandchildren or any other eligible beneficiaries.
The minimum balance to open a CESA IRA CD is $1,000. The minimum balance to open a CESA IRA
Savings Account is $100. You must maintain the minimum balance indicated in the tables above to earn the
disclosed APY. A penalty may be imposed for early withdrawal. The minimum balance to avoid being charged
a monthly maintenance fee is $100. The interest rates and APY may change after the account is opened for all
interest bearing accounts except CDs. Calculations of the APY assume interest is credited to the account
monthly. Fees could reduce earnings on accounts.
Refer to the appropriate Fee Schedule
Terms and Conditions
Maximum Annual Contribution
The annual contribution limit is $2,000 per student.
It may be right for you if:
You want to help pay for a child's education and you want earnings to grow tax-exempt.
Your modified adjusted gross income is less than $220,000 for married taxpayers filing jointly and less than $110,000 for single taxpayers.
TO LEARN MORE, CALL 800.837.4214
Contributions to a CESA
Nondeductible contributions may be made to each child's account annually.
Contribution deadline is the same as the contributor's tax filing deadline, not including extensions.
You can make contributions to a CESA up to $2,000 each year per student.
The designated student must be under 18 years of age (or older than 18 if the student is a special needs beneficiary).
You, your employer, a non-profit corporation and even the student can make contributions to a designated student's CESA.
Withdrawals, penalties and fees for IRAs
CESA withdrawals used to pay for qualified education expenses, are generally tax-free and not subject to a 10% federal additional tax for early withdrawal. Bank penalties may apply for withdrawals from time deposits before maturity.
Funds in a CESA must be distributed to the designated student by the time the student reaches age 30, or rolled over to another eligible family member's CESA.
This communication is for information purposes only and is not intended nor should be regarded or construed as legal advice, tax advice, an offer to sell or buy any financial product, an official confirmation of any transaction, or as an official statement of TAB Bank Inc. All information is subject to change without notice. For more information, please consult the IRS website at www.irs.gov or your own tax advisor or attorney with regard to your individual situation