Hiawatha National Bank offers the following types of Education and Retirement Savings accounts:

Coverdell Education Savings Account (CESA)

A CESA is a nondeductible account that features tax-free withdrawals for a very specific purpose-a child’s education expense.  Distributions are penalty free and Federal income tax free when used to pay for a qualifying education expense.   Contributions to a Coverdell are not deductible, but amounts deposited in the account grow tax free until distributed.  This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.  This account provides an incentive to help parents and students save for education expenses.

Traditional IRA

A traditional IRA is a personal savings plan that gives you tax advantages for setting aside money for retirement.  If you are younger than age 70 ½ and earn wages you are eligible to establish and make contributions to a Traditional IRA Retirement account.    Contributions you make to a traditional IRA may be fully or partially deductible, depending on your circumstances and generally, amounts in your traditional IRA (including earnings and gains) are not taxed until distributed.

Roth IRA

The Roth IRA provides no deduction for contributions, but instead provides a benefit that isn't available for traditional retirement accounts: if you meet certain requirements, all earnings are tax free when you or your beneficiary withdraw them. Other benefits include avoiding the early distribution penalty on certain withdrawals, and eliminating the need to take minimum distributions after age 70½.