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Coverdell Education Savings Account

Take advantage of tax-deferred savings for all things education.1


What is a Coverdell Education Savings Account (previously known as Education IRA)?

With an Education Savings Account (ESA), you can invest in the future of a child — tax-deferred and federal tax-free for elementary, secondary and higher education expenses.

It was created as a tax-deferred trust account by the U.S. government to assist families in funding educational expenses for beneficiaries who must be 18 years old or younger when the account is established. The age restriction may be waived for special needs beneficiaries. While more than one ESA can be set up for a single beneficiary, the total maximum contribution per year for any single beneficiary is $2,000. The student must disburse funds by age 30.

Reap the benefits

Tax savings

Tax-deferred funds for child’s education

Investment options

Choose from savings, money market, or certificates

Contribution limit

Up to $2,000 annually

Save for education

Can cover school expenses from K- college

Tax-free withdrawals

If you use the money for a qualified purpose, it’s tax-free

Tax-free earnings

Interest earned is tax-free1

College Savings Calculator

How much should I be saving for college?

How much should I be saving for college?

With college costs increasing at twice the rate of inflation, it is important to start saving early. Interest working for you now in a regular savings program is much better than having interest work against you in the future in the form of education loans. Use our college savings calculator to determine how much you should be saving for college on a regular basis.

Current Savings and Assumptions

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NameCurrent Age
(0 to 30)
College Start Age
(0 to 30)
Years Attending
(0 to 20)
Annual Cost

Assumptions

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This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.

Calculations provided are for demonstration purposes only and do not guarantee credit approval for the rate and terms displayed.

Frequently Asked Questions

1 Consult your tax advisor about Coverdell Education Savings Account (ESA) advantages.

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