Summary

Save for qualified education expenses for yourself and your student by setting up a savings account early. A Coverdell Education Savings Account (ESA) provides a tax-free safe place to grow competitive dividends — as well as financial confidence for a new stage in life.

Account Details

  • Set aside funds for your child's education
  • No setup or annual fee
  • Dividends grow tax-free
  • Withdrawals are tax-free and penalty-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  • The money must be withdrawn by the time he or she turns 30***
  • The ESA may be transferred without penalty to another member of the family
  • No minimum deposit to open

*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.