Education Savings
Two Programs Available
There are two things to keep in mind for members wanting to take advantage of the two education savings program offered by Nizari Progressive Federal Credit Union. First, Coverdell ESA may not be sufficient for all members since there is limit of $2,000 per year per beneficiary, imposed by IRS regulation. Second, Nizari College Savings account provides additional means of saving and provides a better interest rate than most low risk money market accounts. We strongly encourage saving on a regular monthly basis rather than an annual lump sum of $6,000.
| Coverdell Education Savings Account | |
|---|---|
| Income Limits | Contribution is phased out if income is $95,000 – $110,000 if single, or $190,000 – $220,000 if married |
| Contribution Limits | $2000 per year per beneficiary |
| Control | Beneficiary may assume control at age 18 or 21 in most states |
| Uses | Education expenses for kindergarten through high school, college and graduate school. Expenses include tuition, books, and lodging. |
| Change Beneficiary | Yes |
| Withdrawal Penalties | 10% IRS Penalty on earnings |
| Earnings | 1/2 % over declared dividend |
| Insurance | NCUSIF insured |
| Tax Treatment | Tax exempt. In case of withdrawals for non-educational purpose, all earnings will be taxed in the year it is withdrawn. |
| Nizari Credit Union College Savings Account | |
|---|---|
| Income Limits | No income limits for contribution |
| Contribution Limits | $6000 per year per beneficiary |
| Control | Account is controlled by custodian |
| Uses | Education expenses for college and graduate school. Expenses include tuition, books, and lodging. |
| Change Beneficiary | Yes |
| Withdrawal Penalties | 10% Penalty on earnings |
| Earnings | 1/2 % over declared dividend |
| Insurance | NCUSIF insured |
| Tax Treatment | Earnings subject to tax every year. Custodian will receive 1099-INT each year. |
Getting Started
Please click the appropriate link below to download an account form.
This Credit Union is federally insured by the National Credit Union Administration (NCUA). Learn more about the NCUA here.
Other Personal Banking Products
Visit a Branch
Have a question?
Unlike other financial institutions, we are not open to the general public. Please take time to discover how you qualify. If you need assistance, please call our Member Service Center at 281-921-8500 or send us a message.
