- Allows an individual to save money for a child’s higher education on a tax-favored basis.
- Qualified higher education distributions from an education IRA are penalty free and tax-free.
- $500.00 per year is maximum that can be deposited on behalf of a child.
- It allows contributions into Education IRA’s for as many children as desired.
- There is no requirement that the contributor have earned income.
- Your Modified Adjusted Gross Income (MAGI) cannot exceed certain limits, same as traditional.
- Investments are normally tied to CD rates and terms can be adjusted to match the customer’s plans.
- Funds placed in this account are FDIC insured.
- It is an easy way for the customer to plan and save for the children’s education.
- You will earn more money in your account because CD’s are competitively priced and generally pay more than demand deposit accounts.
- When the beneficiary is ready to take his or her withdrawal for school, there are no taxes due on any of the interest that your money has earned.
- Distributions are to be during the year in which the education expense occurred
- Your money is safe because the federal government insures it.
- Parent’s saving for their children’s educational needs.
- Customers asking about tax shelters.
- Current customers with small children needing more than one bank service.
*Disclosure of Certificate of Deposit and IRA Deposits
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