Rate Information: The dividend rate and annual percentage yield on this account is set forth above. Your dividend rate and annual percentage yield may change at any time.
Nature of Dividends: Dividends are paid from current income and available earnings after required transfers to reserves at the end of the dividend period. The dividend rate and annual percentage yield are the prospective rates and yield the credit union anticipates paying for the applicable dividend period.
Compounding and Crediting: Dividends will be compounded and credited monthly. The dividend period for this account is monthly beginning on the first day the month and ending on the last day of the month.
Accrual of Dividends: Dividends will begin to accrue on non-cash deposits on the business day you make the deposit to your account. If you close your account before accrued dividends are credited, accrued dividends will not be paid.
Contributions: The maximum amount that can be contributed each year to a child’s Coverdell ESA is $2,000 per calendar year. If your modified adjusted gross income is over $95,000 for single filers or $190,000 for joint filers, the amount you can contribute will be less.
Balance Calculation Method: Dividends are calculated by the daily balance method which applies a daily periodic rate to the balance in the account each day.
Transaction Limitations: Penalties assessed for any withdrawal made during the first five years will be six months interest on the amount withdrawn based on the current prospective rate. Penalties assessed for any withdrawal made after five years will be three months interest on the amount withdrawn based on the current prospective rate. There will be an annual grace period of 10 calendar days beginning with the beneficiary’s birthday. Penalties will not be assessed for Qualified Withdrawals.
Qualified Withdrawals: Qualified withdrawal not subject to penalty must be used for education expenses including tuition, fees, books, and equipment required for enrollment or attendance at nearly any post-secondary educational institution (public, nonprofit, or proprietary). Certain room and board expenses also may qualify. Qualified expenses also include these same expenses for elementary and secondary education and the purchase of computer technology or equipment that is used by the beneficiary and the beneficiary’s family while the beneficiary is in school.
For further information, call a Member Services Representative at 800-824-2575.