Other Savings and Money Market Accounts  >  Coverdell Menu  >  Coverdell Education Savings Account

Coverdell Education Savings Accounts

The Former Education IRA

Now Available: DCU's Retirement Central Service Center –
This online service has educational interactive information and articles to help you, at whatever stage you're at in your financial life. You can also complete your IRA forms online. Visit our Retirement Central Service Center.


The Coverdell Education Savings Account (CESA) is not an IRA at all, but a new way to save for qualified higher education expenses such as tuition, fees, books, supplies, and equipment (including the purchase of a computer, educational software and internet access) required for college, vocational, public and private elementary and high schools.
Education Savings Accounts are available only to children under 18. Each child can receive up to $2,000 per year in after-tax contributions from relatives and friends whose adjusted gross income (AGI) is $220,000 or less if married or $110,000 if single. Earnings grow tax-free.
Contributions can be made for beneficiaries with special needs (determined by The Treasury) over age 18. CESA balances for those with special needs are not required to be distributed by age 30.
Distributions taken after five years are tax free and must be used for qualified higher education expenses. Tax penalties apply for early withdrawals and use for non-qualified expenses.
Please consult a tax advisor to determine how federal, state, and local tax laws affect Education Savings Accounts.
At DCU, federally-insured Coverdell Education Savings Accounts are available as Certificate IRAs, Money Market IRAs, and Savings IRAs.
All DCU Deposit Accounts are federally insured up to $100,000 by the National Credit Union Administration (NCUA), a U.S. Government Agency. IRAs are insured for an additional $100,000 per member.
To beginning of page
Jump over navigation links to end of page
What's New at DCU | Join Us | New Member Guide | Links | Branches | ATMs | Feedback | Help
Digital Federal Credit Union
Digital Federal Credit Union
220 Donald Lynch Boulevard
PO Box 9130
Marlborough, MA 01752-9130
508.263.6700 • 800.328.8797
 DCU is an Equal Housing Lender    Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency. Select for more information.

© 2008. Digital Federal Credit Union