- Coverdell Education Savings Account
Lay a foundation of success for your child or a child you know — start saving early for educational expenses with a Coverdell Education Savings Account.
Your contributions will earn competitive interest, tax-deferred. When it comes time for your recipient to withdraw funds, the funds are tax-free as long as they're applied to qualified educational expenses. Prepare your child for a bright future today — apply for your account online in minutes.
- Save for a child's future educational expenses
- No annual maintenance fee
- Earnings grow tax-deferred
- Distributions are tax-free when applied to qualified education costs
- Can be opened by anyone — not just family members of a child
- Can be opened for any child younger than age 18
- Special needs children may be eligible after they reach 18
- No minimum opening deposit required
- Contributions limited to $2000 annually
- Contributions are not tax-deductible
- Contributions must stop when beneficiary reaches age 18
- Beneficiary must withdraw remaining assets within 30 days after reaching age 30, or roll assets over tax-free to a new Education ESA for the benefit of another eligible family member
- Distributions not used for qualified educational expenses are taxable, and subject to a 10% penalty
- Taxpayers filing jointly with AGI (Adjusted Gross Income) below $190,000 are eligible to contribute (eligibility phases out as AGI increases from $190,000 to $220,000).
- Single filers with AGI below $95,000 are eligible to contribute (eligibility phases out as AGI increases from $95,000 to $110,000)