Education Savings: a Lesson Plan Ahead

Make an annual non-tax deductible contribution to a Coverdell Education Savings Account (ESA) and the earnings to your account grow tax-free. Better still, distributions can be completely tax-free.* And these savings can be used to fund more than just college—even elementary and secondary school expenses qualify.

Get Started by calling us at (602) 910-1974 or stop by your neighborhood Ubium Bank branch.

How it Works

For each beneficiary, you can open an account with as little as $50. A beneficiary can receive up to $2,000 total in contributions in after-tax dollars annually. The earnings on your contributions grow tax-free, and when it comes time to use the funds you’ve saved up, you can do so without having to pay any additional taxes. (There are a few other details. Chat with an Ubium Bank Associate or your tax advisor for additional info.)

Acceptable Uses

An ESA can be used for Elementary, Secondary and Post-Secondary “Qualified Education Expenses.” These expenses include, Tuition, Room & Board, Books, Tutoring, Uniforms, other School Fees, Books & Supplies, Computers and Internet Access.

Other Details

You can change the beneficiary of the account. A contribution must be made before the beneficiary turns 18, unless the beneficiary is a special needs beneficiary. You can also rollover any unused ESA funds, without penalty, to other family members under the age of 30 or a special needs beneficiary.

Fees you Should Know About

Yes, there are a few. Give us a call at (602) 910-1974 or come into your neighborhood store and we can go over them with you.

Who Can Use the Savings

The account can be opened by a Parent or Guardian, and Contributions can come from Parents, Grandparents, Relatives, Friends or Family Members. Contributor adjusted gross income must be under the limit set for a given tax year to be eligible – see us for details on the current year’s limits. The beneficiary of the account must use the funds before they turn 30.