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Coverdell Accounts Photo Coverdell Accounts

Are you dreaming about your child or grandchild walking across a stage with a college diploma in hand? College degrees can open a world of career potential. Break down yet another barrier for your family by helping reduce college debt. Even a little bit set aside today can make a difference over time. Central Bank can help.

Central Bank’s Coverdell Education Savings Account provides a tax-sheltered place to save and grow your money to help shoulder the financial burden of higher education.

The Coverdell Education Savings Account from Central Bank offers the tax benefits and investment options you need to ensure your contributions grow to support your child or grandchild in their quest for higher education:

What is it?  A tax-sheltered plan designed to build a fund for qualified education expenses while the earnings grow tax-deferred and qualifying distributions are tax-free.
 

Who’s it for? Any designated individual under the age of 18 where the contributor elects to save on behalf of a designated beneficiary for their education costs.
 

Eligibility requirements: 

  • Designated beneficiary must be under the age of 18 unless a special needs individual.
  • Contributor’s Modified Adjusted Gross Income cannot exceed allowed limits.

Contributions: 

  • $2,000 aggregate limit per designated beneficiary.
  • Must be made by tax-filing due date of contributor, excluding extensions.
  • May be made in one lump sum or in small periodic amounts.

Distributions:

  • Tax-free and IRS penalty-free if taken for qualified education expenses.
  • Upon designated beneficiary reaching age 30, any remaining fund balance must be distributed to the designated beneficiary.

Consult your tax advisor for details.

Who can contribute to a Coverdell Account?

Parents, grandparents, other relatives and the child who is the beneficiary of the Coverdell Account may all contribute to the account.

What expenses are covered by a Coverdell Account?

Coverdell Accounts can be used to pay for tuition and fees, the cost of books and other supplies, and in some circumstances may be used to help pay for room and board.

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