Education Savings Accounts
Help save for your child’s future with a Coverdell education savings account. Investing in education is essential for you and your family’s long-term financial well-being. At Spirit of Alaska Federal Credit Union, we make saving for college easy—all withdrawals are tax-free when used for qualified education expenses. As an added bonus, unused funds can be used for other family members’ educations. An account can be started by anyone interested in contributing. We welcome parents, grandparents, and relatives to open one today.
A tax advantaged IRA style account to save for qualified education expenses
- No annual maintenance fee
- All earnings are tax-deferred
- No IRS penalties when used for education
- Contributions can be made until the child reaches age 18
- Contribute up to $2,000 per child per year
"Over the years you have done a fabulous job helping me. I recommend you to friends who tell me they plan on heading to Fairbanks."- T.L.
Distribution may begin at the age of 18*. Funds must be distributed by age 30.
Contributions are not tax deductible, and may be made until child reaches the age of 18.
Must be coordinated with other education plans such as State Tuition Plans or HOPE and Lifetime Learning tax credits.
See Education Savings details from the IRS to find further specifics on income limitations, contributions, and withdrawals.
*Distributions must be used for qualified higher education expenses such as tuition, fees, books, supplies, and equipment for colleges and vocational schools. Funds must be distributed by age 30. Must be coordinated with other education plans such as State Tuition Plans or HOPE and Lifetime Learning tax credits
Contribution income limitations apply.
Education Savings Rates
Account Type Min. Opening Bal. Min. Bal. to Earn Dividends Dividend Rate APY*
Coverdell Education Savings
$0.00 $0.01 0.15% 0.15%
*Annual Percentage Yield. Refer to our Pricing Guide (PDF) for all fees. Fees may reduce earnings. Rates are subject to change at any time. Current as of 28 January 2021.
Frequently Asked Questions
Who can contribute to a Coverdell Education Savings Account?
Education Savings Accounts are NOT limited to family. Anyone can contribute.
What portions of the account are tax free?
Interest grows tax free, and taxes are waived when the distributions are spent on qualified educational expenses, such as tuition, fees, books, supplies, and equipment for colleges and vocational schools.
Is the money I contribute tax-deductible?
No. You must still pay taxes on contributions.
My child has finished college, and there are still funds left over this in this account. Can I designate those funds for one of my younger children?
Yes. Unused funds may be rolled into another IRA for a new beneficiary under the age of 18.
- Who can contribute to a Coverdell Education Savings Account?