- Educational IRA, Coverdell Educational Savings Programs and the 529 account
- What are the differences between an Education IRA, the Coverdell Education Savings Account and the 529 Savings Account?
The Coverdell Education Savings Account replaced the original Education IRA. It can be withdrawn tax-free not just for college, but also for K-12 qualifying educational expenses such as tutoring, tuition, books and home computers. The Coverdell can also be used for special needs children. There is a contribution limit of $2000.00 a year per child. The Coverdell has age limits on the beneficiary- he or she must be under 18 to receive contributions and the account must be used by the time the beneficiary is age 30, unless it a special needs child. The Coverdell ESA is opened at the credit union under the child's own account.
A 529 Savings Account plan is a tax-advantaged savings account used to pay for qualifying higher education expenses for students. The student can be your child, a family member, non-relative or yourself. Each state sponsors its own plan and has its own investment options and rules. Learn more about the CollegeBoundfund Enrollment or State of GA 529.
For more information on the Coverdell Education Savings Account (formerly Education IRA's), please click here to visit our IRA Service Center.
- Explanation of a Traditional or Roth IRA & Coverdell Education Savings Account
- What is a Traditional or Roth IRA & Coverdell Education Savings Account?
Traditional and Roth IRAs are accounts that provide tax advantages while helping Americans save for retirement. The Coverdell Education Savings Account is created for the purpose of paying qualified education expenses of the designated beneficiary (a child) of the account. IRA and Coverdell ESAs opened at Delta Community CU are insured, dividend paying accounts. Visit our IRA Service Center for more information on IRAs and Coverdell ESAs.
- Decide not to use Coverdell Educational Savings Account
What happens to the Coverdell Educational Savings Account if my child chooses not to go to college?
Coverdell ESA assets not used by the designated beneficiary s 30th birthday will be distributed within 30 days as taxable income to the designated beneficiary. Or, the funds may be rolled over to an eligible family member s Coverdell ESA.
For a complete list of eligible family members please visit our IRA Service Center.
- Inactive accounts and the accounts that are affected
- What is an inactive account?
An account becomes inactive when the aggregate balance in its deposit accounts (Savings, Checking, Additional Savings, and Money Market) is less than $100 and there is no activity for 6 consecutive months.
- Accounts owned by members 17 years old and younger, are not subject to becoming inactive. Once they turn 18, they will be subject to the current inactive criteria and fee.
- Inactive accounts are charged a $5 montly service charge until the account reaches a zero balance and is closed or until the account has activity
- If the member has an active loan, the account will not reach an inactive status, regardless of the amount on deposit.
- IRAs are not subject to the inactive account status
We encourage members to deposit regularly into their accounts, thus eliminating the $5.00 monthly Inactive Account Fee. A notice advising that the account is approaching an inactive status prior to having any fees deducted will be sent. The inactive account fee is deducted the first business day of the month after the letter is mailed.
How can I avoid my account changing to an inactive status?
- Maintaining a balance of at least $100 regardless of the number of transactions
- Conducting at least one transaction every 6 months (this can be a transfer from one share to another, withdrawal, and or deposit)
- Having an active loan(s) such as a Visa credit card
How do I reopen an account that closed due to inactivity?
If the account has been closed less than 30 days, the primary member may reopen the account over the phone after verification is completed.
To reactivate an account after 30 days of closure, the primary member will need to complete a signature card and re-qualify for membership.
- IRA Contribution Limits
- How much can I put in my IRA for this year and can it be done online?
For 2013 the IRA contribution limit is $5,500 and the IRA catch up contribution limit is $1,000*.
For 2014, the IRA contribution limit and catch up contribution limits will remain the same:
*The IRA catch up contribution limit stated is for those individuals who will reach age 50 before the end of the tax year.
Contribution limit $5,500
Catch up contribution limit $1,000*
You can make regular IRA contributions online from your own Savings, Additional Savings, Checking or Money Market accounts. To do this, log in to your Online Banking account and transfer the funds utilizing the Transfer tool. (Contributions for the prior tax year may be made online until the tax return due date of the current year - generally April 15th)
If you prefer to mail a check for your regular contributions, you may access the proper form by clicking here. Complete, sign, and mail to Delta Community CU, P.O. Box 20541, Atlanta, GA 30320-2541, Attn: Personal Deposit Services Dept.
You may find more information on contribution eligibility at the IRA Service Center.