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Membership in Northrop Grumman Federal Credit Union means co-ownership in one of the strongest credit unions in the country.

Coverdell Education Savings

The Coverdell Education Savings Account offers contributors to the future educational expenses of a student beneficiary a way to pay no federal tax on dividends their savings generate, as long as the accumulated savings are used for the student beneficiary's primary or secondary school, college, graduate or vocational education. Eligible expenses include tuition, tutoring, books, supplies, room and board, and computer equipment, among other education essentials.

Summary

With an NGFCU™ Coverdell Education Savings Account:

  • Contibutor sets up an account naming an individual under the age of 18 as beneficiary. Contributions of after-tax dollars can be made into the account until the beneficiary's 18th birthday.
  • Contributor can start an Accumulation Account with as little as $5 at Northrop Grumman Federal Credit Union.
  • More than one person can open a Coverdell Education Savings Account for the same beneficiary; but the total contributions in one year for one beneficiary may not exceed $2,000.
  • Contributor can open an account for child, grandchild, niece, nephew, or any other individual younger than 18.
  • Maximum contributions depend on the contributors' modified adjusted gross income (MAGI).
  • Contributions may be made until the due date of the contributor's return, without extensions.
  • Beneficiary, or account owner, may withdraw the funds tax-free, as long as withdrawals do not exceed the beneficiary's eligible education expenses in the year withdrawn.
  • Beneficiary has until 30 days after his or her 30th birthday to withdraw all funds for education expenses without penalty.
  • Beneficiary may rollover unused funds to a Coverdell ESA for another family member to avoid taxes and penalties.
  • Funds may be withdrawn tax free for qualified educational expenses primary school through higher education.

For more information, visit Coverdell Education Savings Account

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