Coverdell Education Savings

Invest in future educational expenses with a Coverdell Education Savings account. Formerly called the Education IRA, this account type gives a tax-advantaged savings vehicle for educational purposes. Unlike a traditional or Roth IRA, the funds contributed are considered a gift to the designated beneficiary under the age of 18. Start saving today for education tomorrow!

Coverdell Education Savings
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Summary

Account Benefits

  • Save for future educational expenses for a designated beneficiary
  • No annual maintenance fee
  • Interest grows tax free
  • Withdrawals are tax free when used for qualified education expenses
  • Anyone may contribute, not just family
  • Unused funds may be rolled into another IRA for a new beneficiary under the age of 18.

Account Requirements

  • Distribution may begin at age 18
  • Contributions are not tax deductible
  • Contributions may be made until child reaches age 18
  • Funds must be distributed by age 30
  • Must be coordinated with other education plans such as State Tuition Plans or HOPE and Lifetime Learning tax credits
  • Maximum contribution of up to $2,000 per child per year
  • Contribution income limitations apply**

Take a look at our current rates here.


*Distributions must be used for qualified higher education expenses such as tuition, fees, books, supplies, and equipment for colleges and vocational schools.

**The maximum contribution limit for tax-year 2012 is $2000 per child per year depending on your Adjusted Gross Income (AGI). Joint filers with AGI less than $220,000 and single filers with AGI less than $110,000 are eligible for maximum contribution amounts. Individuals with a modified adjusted gross income between $190,000 and $220,000 (joint) and $95,000 and $110,000 (single) are eligible for reduced contribution amounts. If the modified adjusted gross income is $220,000 (joint) or $110,000 (single) or more, no contributions may be made to anyone's Coverdell ESA.


NCUA insured up to $250,000

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