It's never too early to start planning for college.
Both the 529 and Coverdale are excellent college savings plans.
As parents, you want the best for your children. With tuition costs and student loan debt growing to unprecedented levels, saving ahead of time can make a big difference for you and your children! Starting as early as possible is key! Contact Interra to learn about programs to help save for higher education.
How does a 529 college savings plan work?
A 529 college savings plan is a specialized savings account used to save money for college. 529 plans work similar to a Roth IRA, in that contributions are made with after-tax dollar and earnings accumulate tax-deferred. The money in a 529 plan may be used for college tuition and K-12, tax-free1.
What is a Coverdale Educational Savings Account?
A Coverdale Educational Savings Account (also known as an Coverdale ESA or ESA) is a tax-advantaged1 investment account designed to encourage savings for future education expenses (elementary, secondary, or college). It was introduced to include primary and secondary school, not just college and university.
Can you have both a 529 and Coverdale?
Yes. Both the 529 and Coverdale are excellent college savings plans. Even though the 529 can now be used to cover primary and secondary tuition, the Coverdale allows for a broader range of K-12 expenses such as uniforms or room and board.
What happens to a 529 or Coverdale ESA if not used for education?
If money is taken out of a 529 plan, or Coverdale, for any purpose other than education, the account owner may have to pay both income taxes on the earnings and a 10% penalty on all the money withdrawn from the plan1.
529 College Savings Plan
- Available to Indiana residents only.
- Earn, tax-free1.
- Receive a 20% state tax credit, up to 1,0001.
Coverdell Educational Savings Account
- Works much like a Roth IRA.
- Designed specifically for your child's secondary, undergraduate, and graduate education expenses.
- Two tax advantages: tax-free earnings and tax-free distributions1.
1Consult with your tax adviser.