Coverdell Education Savings Accounts
Help your child get ahead in life with a savings plan that grows alongside their dreams.
Unless your kid is the next Mark Zuckerberg, they will probably need a hand with high educational expenses. Fortunately, our Coverdell Education Savings Account (CESA) is here to help. It eases college planning stress and opens many doors for your child’s bright future.
UMe Coverdell ESA Details
Tax- and penalty-free withdrawals
Withdraw whenever and whatever you need to for qualified educational expenses.1
Save up to $2,000 per year
Friends, family members, and anyone else can contribute up to a maximum of $2,000 per child yearly.
Transfer funds between children
Easily redistribute money between your children’s educational savings accounts.
Open with $25
Open the account with a $25 minimum deposit and maintain that balance to earn dividends.
Use with other plans
You can use this college savings account in conjunction with other education savings plans.
Federally insured
The National Credit Union Administration (NCUA) federally insures your college savings for up to $250,000.
Coverdell Education Savings Accounts Rates
|
TERM AND ACCOUNT TYPE |
MINIMUM BALANCE* |
DIVIDEND RATE |
APY** |
|---|---|---|---|
|
*Minimum average daily balance required to earn dividends. Membership Shares, IRA Savings, IRA Certificates and Special Savings dividends are based on the average daily balance and are posted quarterly. Checking, Money Market and non-IRA Certificate Accounts are based on the average daily balance and are posted monthly. Certificate Accounts are subject to penalties for early withdrawal. Please contact one of our Financial Services Representatives for further information about applicable fees. IRA Certificates may be subject to additional Internal Revenue Service penalties for early withdrawal. Certificate rates are fixed for the term purchased. All other rates and yields subject to change without notice. **APY is Annual Percentage Yield. |
|||
|
TERM AND ACCOUNT TYPE Coverdell Savings |
MINIMUM BALANCE* $25 |
DIVIDEND RATE 0.05% |
APY** 0.05% |
|
TERM AND ACCOUNT TYPE 12 to 23 month Coverdell Certificates |
MINIMUM BALANCE* $2,000 |
DIVIDEND RATE 3.49% |
APY** 3.55% |
|
TERM AND ACCOUNT TYPE 24 to 35 month Coverdell Certificates |
MINIMUM BALANCE* $2,000 |
DIVIDEND RATE 3.40% |
APY** 3.45% |
|
TERM AND ACCOUNT TYPE 36 to 47 month Coverdell Certificates |
MINIMUM BALANCE* $2,000 |
DIVIDEND RATE 3.35% |
APY** 3.40% |
|
TERM AND ACCOUNT TYPE 48 to 59 month Coverdell Certificates |
MINIMUM BALANCE* $2,000 |
DIVIDEND RATE 3.40% |
APY** 3.45% |
|
TERM AND ACCOUNT TYPE 60 month term |
MINIMUM BALANCE* $2,000 |
DIVIDEND RATE 3.45% |
APY** 3.50% |
Additional CESA Information
Our Coverdell ESA offers fantastic benefits beyond simply saving for college costs. Here’s how these unique accounts can set your child up for success:
CESA funds aren’t just for college! They can help pay for qualified K-12 expenses as well. That means private school tuition, specialized tutoring, and even fees for academic programs. It’s flexible support to help your child succeed at every stage of their learning.
Funds in a Coverdell ESA don’t hurt your child’s chances of getting financial aid as much as other savings options. That’s because lenders treat them as a parental asset. This allows you to build a bigger college fund while still potentially maximizing their financial aid eligibility.
Unlike some savings plans, a Coverdell ESA gives you many investment options. Choose a conservative approach for predictable growth or opt for potentially higher returns—depending on your comfort level. Talk to your financial advisor to choose the best investments for your child.
— Rachelle G., Burbank, CAEvery time I walk into UMe Credit Union, I have the best experience. The tellers are friendly. Opening a checking account was so simple. And if my young kids come along with me, they enjoy the iPads (with fun kids apps) in the waiting area. I highly recommend this bank!
How to open an Education Savings Account (ESA)
Review your eligibility
Check out our Open an account to see if you qualify to join the UMe financial family. Spoiler: We make it easy for anyone to join!
Fund the account
You can open a CESA at the same time you join UMe. Simply deposit $25 and take the first step to help secure your child’s future.
Start saving!
Anyone (including non-members) can contribute to your child’s Coverdell savings account up to a total of $2,000 annually.
Why UMe is the intelligent choice to open a CESA
Forget about big banks – at UMe, you’re not just a customer, you’re a member and an owner. That means better rates, lower fees, and friendly service from people who genuinely care about your financial success. But being a member-owned credit union is about more than just the numbers.
UMeHelps: Building a Stronger Community
At UMe, we believe in giving back to help build a strong Burbank. Our UMeHelps program focuses on supporting the incredible work of local organizations. Here’s a look at our 2024 charitable initiatives:
- American Cancer Society
- Burbank Arts & Education Foundation — 15 for 15 Challenge
- Burbank Coordinating Council — Holiday Basket Program
- Burbank Temporary Aid Center (BTAC)
- National Academy Foundation — Burbank & Burroughs High School
Beyond Banking: Why UMe is Different
- Personalized Support: We take the time to understand your needs and goals.
- Dog-Friendly: Your furry friend is always welcome – treats and ear scratches included!
- Tech-Forward: Manage your accounts easily with our top-notch online and mobile banking.
Ready to Join the UMe Family?
It’s simple! You’re eligible if you live, work, worship, go to school, or belong to an organization in Burbank. Not quite a fit? No problem – a small $10 donation to the Burbank Arts & Education Foundation opens the door to membership (and we’ll even help you get it done!).
UMe Coverdell Savings Account FAQs
Income limits are up to $110,000 for single or up to $220,000 (combined) for married.
The IRS will not allow you to contribute to a Coverdell after the beneficiary reaches age 18.
When the beneficiary reaches age 30, they must withdraw all funds from the Coverdell ESA.
Qualified expenses include tuition, books, fees, computer equipment, and technology required for elementary, secondary, and post-secondary education. You can find additional qualified expenses on the IRS website.
Yes! While contributions to a Coverdell ESA are not tax-deductible, the earnings on your investments grow tax-free. Withdrawals are also completely tax-free if you use the funds for qualified educational expenses. This makes a Coverdell ESA a smart way to save for your child’s education.
Open a Coverdell Education Savings Account
Disclosures
1 Consult your tax advisor. Although the funds you contribute are not tax-deductible, earnings on your investment are tax-deferred, and withdrawals of your contributions and earnings, under certain conditions, are tax-free after five years.