Educational Savings Accounts (ESAs)

Good If You...

• Desire a Tax-Advantaged Investment Account to Accumulate Savings to Cover Future Education Expenses (Elementary, Secondary or College)
• Want the Security of FDIC Insured Deposits
• Establish the Account for a Designated Beneficiary Who is Under the Age of 18 or Has Special Needs
• Don’t Want to Risk Funds in the Stock Market

Features

• $500 Minimum Opening Balance
• Accumulated Balances Must be Withdrawn before Beneficiary is 30 Years Old
• Total Annual Contributions Limited¹
• Interest Earnings are Tax-Free¹
• Can Be Withdrawn for College or Private School Tuition & Expenses

What Is the Investment Vehicles for My ESA?

When you open an ESA with us, it is structured as a fully FDIC-insured Certificate of Deposit account which offers limited or no access during the term you select with a fixed interest rate paid on your full balance. You may wish to coordinate the date of your annual ESA contribution with your CD's maturity date so you can combine new contributions with existing education savings balances. You can also setup a CD Ladder for your ESA CDs, which will allow you to make more frequent contributions at the maturity dates of each CD in your ladder.

Other ESA Options

Educational Savings Accounts can also be structured as a brokerage account invested in stocks, bonds or other types of investments which are not guaranteed and may lose value. If you are interested in this type of education savings option, please contact a representative from First Citizens Investment Services.²

How is an ESA Different from a 529 Plan?

A 529 Plan, so named because of the section of the tax code dealing with this type of account, is a state-sponsored, tax-deferred education savings plan that has no age limits. Unlike an ESA, there are no annual contribution limits and your contributions are invested by a portfolio manager. If you are interested in this type of education savings option, you may contact a representative with First Citizens Investment Services.²

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