Riverfront Federal Credit Union

Riverfront is pleased to introduce the Coverdell Education Savings Account to its list of investment choices. Previously known as the Education IRA, the Coverdell Education Savings Account (CESA) is a tax favored investment tool created to help save for a child’s education expenses.

Low minimum deposit: Begin investing with just $1.00
Competitive Rates: Earn tax free dividends on balances of $100 or more
Easy Contribution Options: Make deposits through payroll deduction, direct deposit, in person or through the mail.
Fee free account: Pay no annual service fee or enrollment fee on this account

Who is eligible to contribute?

Anyone can contribute to a CESA on behalf of a child as long as your modified adjusted gross income (MAGI) does not exceed certain limits.
There are no requirements that a contributor have earned income or be under a certain age.
Contributors can also be non individuals such as corporations. These entities have no income restrictions for qualifications.

How much can I contribute?

The total aggregate contribution into one or more CESA’s on behalf of a child is $2000 a year

How does the law define a child?

A child is defined as a person under the age of 18. The child’s eligibility for CESA contributions ends the day after the child attains the age of 18. Children with special needs are not subject to this restriction. A child is also known as the designated beneficiary of a CESA.

Who has control of the assets?

Each CESA will have a responsible individual, usually the child’s parent or legal guardian. That individual has control of the assets until the child reaches the age of majority.

What is a qualified education expense?

CESA funds can be used for elementary, secondary and higher education expenses. Generally these expenses would be tuition, fees, books, supplies, certain computer technology and equipment.

How to apply:

To start investing in a Coverdell Education Savings Account with Riverfront, Contact Us, for an application. A Financial Service Representative will help you determine what options best meet your needs.

CESA Share Certificates are also available. See rates listed below.

For tax advice, consult a tax advisor.

IMPORTANT NOTICE TO MEMBERS WHO HAVE A MONEY MARKET, TRADITIONAL/ROTH IRA, OR A COVERDELL EDUCATION SAVINGS SHARE ACCOUNT

The credit union is amending the dividend rate structure on the Money Market, Traditional/Roth IRA and Coverdell Education Savings (CESA) Share accounts. Effective September 1, 2007, the credit union will calculate dividends on these accounts using a tiered rate structure. The accounts will earn a dividend rate based on the tier in which the account balance falls each day, as shown in the charts below. Beginning next month, the Rate Chart in this newsletter will list the corresponding APYs for these tiers.