Coverdell Education Savings

Coverdell Education Savings

College is becoming increasingly important and also increasingly expensive. And unless you're stacked like Oprah, you're probably going to need a serious saving plan for such a significant expense.

Coverdell Education Savings is a federally backed account that grows competitive dividends, tax-free. And withdrawals are tax-free too, when used for qualified education expenses. There are no setup or annual fees—so get started today.

Summary
  • Set aside funds for your child's education
  • No setup or annual fee
  • Dividends grow 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  • The money must be withdrawn by the time he or she turns 30***
  • The CESA can also be rolled over without penalty to another member of the family
  • NCUA insured

*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.