Education IRA Savings Account
The purpose of an Education Savings Account is to save for a child’s education. If the saved funds are spent on qualified education expenses, the ESA is intended to be tax-free and IRS penalty free for the designated beneficiary, who is the child. The ESA has three participants to the plan: Depositor – the person making deposits to the account; Responsible party – the parent or legal guardian of the child; Designated Beneficiary – the child. The Responsible party of the ESA may change the designated beneficiary provided that the new beneficiary is a qualified member of the family of the original beneficiary.
Please check with a tax advisor to find out about your tax implications. There are many rules and restrictions with the Education Savings Account. Please see a bank representative to see if the product is right for you.
