Coverdell Education Savings Account
Create an easier transition into the next stage of life for yourself and your student by setting aside in savings early. A Coverdell Education Savings Account (ESA) provides a tax-free safe place to grow competitive interest and also financial confidence as your child takes the next step in their educational development.
- Set aside funds for your child's or other beneficiary's elementary, secondary, and/or higher education
- No setup or annual fee
- Interest grows tax-free
- Withdrawals are tax-free when used for qualified education expenses*
- Designated beneficiary must be under 18 when contributions are made
- To contribute to an ESA, certain income limits apply**
- Contributions are not tax deductible
- $2,000 maximum annual contribution per child
- The money must be withdrawn by the time beneficiary turns 30***
- The ESA may be transferred to another member of the family following IRS guidelines
- $1,000 minimum deposit to open
- $1,000 minimum balance required to maintain account
*Qualified expenses include tuition and fees, books, supplies, board, etc.
**Consult your tax advisor to determine your contribution limit.
***Those earnings are subject to income tax and a 10% penalty.