Coverdell ESA (Education Savings Account)

Helping you realize your potential

With tuition soaring and student aid tightening, saving for a child’s education has never been more important. The good news is that PFCU offers a tax-advantaged way to save for education. The Coverdell ESA (formerly Education IRA) is a nondeductible account that features tax-free withdrawals for the specific purpose of a child's higher education expenses from kindergarten through college.

Coverdell ESA Features

  • Tax-free earnings
  • The ability to invest up to $2,000 per year per child
  • Penalty-free withdrawals for elementary, secondary and higher education expenses
  • The option to transfer the account if child does not attend an institution of higher education
  • The option for almost anyone to make contributions

Coverdell ESA Contribution Requirements

  • Make up to the current maximum per year for the designated beneficiary (child)
  • Made if beneficiary is under the age of 18 (or beyond for special needs)
  • Transferred to IRS defined qualified family members if not used by beneficiary

Coverdell ESA Uses

Contributions and earnings are tax- and penalty-free, if used for qualified education expenses, which include:

  • Tuition and fees
  • Books and supplies
  • Computer equipment to be used for education
  • Transportation
  • Room and board—only in some cases
Refer your Friends
National Association of Federal Credit Unions 
PFCU is a proud member of the National Association of Federal Credit Unions
National Credit Union Administration 
Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. National Credit Union Administration, a U.S. Government Agency.
Equal Housing Lender 
We do Business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

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Please note that the amount of money contained in your investment accounts are considered non-deposit products and therefore, are not NCUA insured, not credit union guaranteed, may lose value, are not guaranteed by any government agency. Securities, Financial Planning and Insurance products are offered through LPL Financial, and its affiliates, Member FINRA, SIPC. LPL Financial and Philadelphia Federal Credit Union are independent entities.