The Coverdell Education Savings Account is an excellent way to save for your child's educational expenses. Formerly known as Education IRAs, the earnings on the Coverdell Education Savings Accounts grow tax free. Contributions to the account are not tax deductible.

A Coverdell Education Savings Account can be opened with a minimum deposit of $100.00 to benefit anyone under the age of 18. Contributions of up to $2,000.00 per year per beneficiary are allowed up until the age of 18. Anyone can contribute to a Coverdell Account including parents and grandparents.

Distributions from Coverdell Education Savings Account must be made to cover qualified educational expenses and will generally not be considered taxable income for the child. Examples of qualified expenses include tuition to private elementary and secondary schools, vocational schools, and most post-secondary colleges and universities. Distributions must be made before the beneficiary reaches 30 years old. Funds withdrawn by child for non-qualified expenses will be assessed a 10% IRS penalty and will be considered gross income for the child.

The Lisbon Community Federal Credit Union also allows Coverdell Education Savings Accounts to be opened as Certificates, allowing you to earn higher dividends (interest).

Coverdell Education Savings Accounts were created by federal legislation. As such, there are many, many rules that govern these types of accounts. For more information please contact one of our Member Service Representatives at (207) 353-4144 of toll free at (877) 353-4144.

For current rates see Certificate Account Rates.

Lisbon Community FCU accounts are federally insured up to $100,000 by the National Credit Union Administration, a U.S. Government Agency.