Education Savings
This is a new type of savings plan created exclusively for saving for future, qualified higher education expenses of the designated beneficiary. As long as distributions are not in excess of the amounts spent on qualified higher education expenses, they are generally tax-free.
Account Details:
- Fixed and Variable rate accounts are available.
- Statement: Each account holder is provided with an annual statement.
- For current IRA Rates, please click here
- Fees: We do not charge any service charges or administrative fees.
- Auto Transfer: We offer automatic transfers from another deposit account at The First into your IRA account free of charge.
Statement Savings | Money Market Savings | Kids First Savings | Holiday | Special Purpose | IRA | |
|---|---|---|---|---|---|---|
| Earns Interest | ||||||
| **ATM Card | ||||||
| Minimum Balance to Open | $1.00 | $1.00 | $1.00 | $5.00 | $5.00 | $25.00 |
| Minimum Balance to Earn Interest | $100.00 | $2,500.00 | $50.00 | $5.00 | $5.00 | $25.00 |
| Free Online Banking | ||||||
| Interest Paid | Monthly | Monthly | Credited Monthly | Yearly | At end of Term | Monthly |
| Fees | **$1.00 per month per card | |||||
| Service Charge if Below Minimum | $3.00 if minimum balance is not maintained. | $5.00 if minimum balance is not maintained. Allowed 6 Transfers per month. | ||||
| Open Online | Open Online | Learn More | Open Online | Open Online | Learn More |
Education Savings Accounts Requirements:
The maximum contribution amount is a nondeductible, cash contribution of $2000 per year per child under the age of 18. Contributions can now be made in both ESA’s and qualified tuition plans for the same child for the same tax year, significantly increasing the amount for a child’s education.
The contributor need not be a relative of the child. In fact, the contributor can be the child himself/herself.
Qualified education expenses include tuition, academic tutoring, special need services, books, supplies and other equipment incurred in connection with the enrollment or attendance of the child at a public, private, or religious school providing elementary or secondary education (kindergarten through grade 12) as determined by the law. Also included are room and board, transportation, and supplementary items or services (including extended day programs) required or provided by school.
No deposit will be allowed after the child’s 18th birthday. All funds must be distributed by the child’s 30th birthday. The law provides that the rule prohibiting contributions to an ESA after the child attains age 18 does not apply in the case of a special needs child, nor do all the funds have to be withdrawn by the 30 birthday of a special needs child.
Funds may be transferred to another family member if not used by the original child.
Related Blog Articles
Want to learn more about education savings accounts? Read some of these helpful articles from our blog or contact us today!
